RSP closes lower for the 2nd day in a row
Guggenheim S&P 500 Equal Weight ETF (RSP) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, RSP finished the month 4.99% higher at 106.84 after edging lower $0.05 (-0.05%) today. Trading up to $1.54 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 previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (RSP as at Jul 31, 2020):
Friday's trading range has been $1.63 (1.53%), that's slightly above the last trading month's daily average range of $1.45. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for RSP.
Two candlestick patterns are matching today's price action, the Bullish Closing Marubozu which is known as bullish pattern and one bearish pattern, the Hanging Man.
After trading down to 105.21 earlier during the day, the market bounced off the key technical support level at 105.96 (S1). The failure to close below the support might increase that levels importance as support going forward. After having been unable to move above 107.07 in the previous session, RSP ran into sellers again around the same price level today, missing to move higher than 106.84. The last time this happened on Tuesday, RSP actually gained 1.64% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 107.97 where further buy stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for RSP. Out of 391 times, RSP closed higher 62.15% 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 60.61% with an average market move of 0.38%.