RSP rises to highest close since June 8th
Guggenheim S&P 500 Equal Weight ETF (RSP) Technical Analysis Report for Aug 12, 2020 | by Techniquant Editorial Team
RSP finished Wednesday at 111.20 gaining $0.65 (0.59%). Today's close at 111.20 marks the highest recorded closing price since June 8th. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (RSP as at Aug 12, 2020):
Wednesday's trading range has been $0.90 (0.81%), that's below the last trading month's daily average range of $1.16. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for RSP.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 107.55.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 112.30 where further buy stops might get triggered. Trading close to June's high at 113.16 we could see further upside momentum if potential buy stops at the level get activated.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(14) above 70" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for RSP. Out of 51 times, RSP closed higher 60.78% 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 62.75% with an average market move of 0.25%.