SHY closes below its opening price unable to hold early session gains
iShares 1-3 Year Treasury Bond ETF (SHY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
SHY ended the week -0.05% lower at 86.64 after flat today ahead of tomorrow's Memorial 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 May 22, 2020):
Friday's trading range has been $0.03 (0.03%), that's below the last trading month's daily average range of $0.05. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SHY.
Four candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern and the Tweezer Bottom which are both known as bullish patterns and two bearish patterns, the Bearish Short Candle and the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on May 5th, SHY gained 0.03% on the following trading day.
Prices are trading close to the key technical resistance level at 86.65 (R1). After having been unable to move lower than 86.64 in the previous session, the market found buyers again around the same price level today at 86.64.
Though 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 accelerate should prices move above the nearby swing high at 86.67 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 86.61 where further sell stops might get triggered. With prices trading close to this year's high at 86.80, upside momentum could accelerate should the ETF be able to break out to new highs for the year. As prices are trading close to May's high at 86.73, upside momentum might speed up should the market mark new highs for the month. As prices are trading close to May's low at 86.57, downside momentum could accelerate should SHY mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for SHY. Out of 515 times, SHY closed higher 57.28% 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 55.92% with an average market move of 0.04%.