SHY closes higher for the 2nd day in a row
iShares 1-3 Year Treasury Bond ETF (SHY) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, SHY finished the week 0.01% higher at 84.89 after gaining $0.03 (0.04%) today ahead of tomorrow's Presidents' Day market holiday. Trading $0.01 higher after the open, the ETF was unable to hold its gains as the bears took control ending the day below its opening price.
Daily Candlestick Chart (SHY as at Feb 14, 2020):
Friday's trading range has been $0.02 (0.02%), that's far below the last trading month's daily average range of $0.05. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SHY.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Unable to break through the key technical resistance level at 84.91 (R1), the market closed below it after spiking up to 84.91 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on February 3rd, SHY lost -0.11% on the following trading day.
While SHY is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the close-by swing high at 84.95 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 84.84 where further sell stops might get activated. As prices are trading close to February's high at 84.98, upside momentum could speed up should the ETF mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for SHY. Out of 315 times, SHY closed higher 57.46% 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 56.19% with an average market move of 0.03%.