RSP closes below its opening price unable to hold early session gains
Guggenheim S&P 500 Equal Weight ETF (RSP) Technical Analysis Report for Jul 02, 2020 | by Techniquant Editorial Team
RSP finished Thursday at 102.23 gaining $0.61 (0.6%) ahead of tomorrow's Independence Day OBS market holiday. Trading $0.60 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (RSP as at Jul 02, 2020):
Thursday's trading range has been $1.74 (1.69%), that's below the last trading month's daily average range of $2.51. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for RSP.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on June 26th, RSP actually gained 1.99% on the following trading day.
After spiking up to 103.76 during the day, the ETF found resistance at the 20-day moving average at 103.68.
RSP shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 103.99 where further buy stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for RSP. Out of 288 times, RSP closed higher 57.29% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 63.54% with an average market move of 0.44%.