RSP breaks back below 20-day moving average
Guggenheim S&P 500 Equal Weight ETF (RSP) Technical Analysis Report for Jul 07, 2020 | by Techniquant Editorial Team
RSP finished Tuesday at 101.70 losing $1.65 (-1.6%) on low volume. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (RSP as at Jul 07, 2020):
Tuesday's trading range has been $1.31 (1.28%), that's far below the last trading month's daily average range of $2.46. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for RSP.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on June 23rd, RSP lost -3.31% on the following trading day.
The ETF closed back below the 20-day moving average at 102.75.
The market 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 close-by swing high at 104.27 where further buy stops could get activated. Further selling might move prices lower should the market test June's nearby low at 98.06.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Gap Down" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for RSP. Out of 137 times, RSP closed higher 56.93% 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 61.31% with an average market move of 0.41%.