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 13, 2020 | by Techniquant Editorial Team
RSP finished Monday at 101.59 losing $0.48 (-0.47%) on high volume. Trading $1.07 higher after the open, the ETF was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on July 6th, RSP lost -1.60% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (RSP as at Jul 13, 2020):
Monday's trading range has been $2.23 (2.17%), that's slightly above the last trading month's daily average range of $2.21. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for RSP.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling could accelerate should prices move below the close-by swing low at 99.40 where further sell stops might get triggered. Further selling could move prices lower should the market test June's nearby low at 98.06.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for RSP. Out of 289 times, RSP closed higher 57.09% 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 62.98% with an average market move of 0.42%.