RSP closes within prior day's range after lackluster session
Guggenheim S&P 500 Equal Weight ETF (RSP) Technical Analysis Report for Jul 08, 2020 | by Techniquant Editorial Team
RSP finished Wednesday at 102.00 gaining $0.30 (0.29%). Trading up to $0.83 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (RSP as at Jul 08, 2020):
Wednesday's trading range has been $1.32 (1.3%), that's below the last trading month's daily average range of $2.43. 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.
After moving lower in the prior session, the market managed to close higher but below the previous day's open, forming a bullish Harami Candle. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top and the Takuri Line which are both known as bullish patterns. The last time a Bullish Spinning Top showed up on May 22nd, RSP gained 3.24% on the following trading day.
Prices are trading close to the key technical resistance level at 102.78 (R1).
RSP shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could speed up should prices move above the nearby swing high at 104.27 where further buy stops might get triggered. Further selling could move prices lower should the market test June's close-by low at 98.06.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Its common bullish interpretation has been confirmed for RSP. Out of 519 times, RSP closed higher 53.18% 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 63.78% with an average market move of 0.47%.