SHY closes above its opening price after recovering from early selling pressure
iShares 1-3 Year Treasury Bond ETF (SHY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, SHY finished Wednesday at 86.50 gaining $0.01 (0.01%). Trading up to $0.02 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (SHY as at Sep 16, 2020):
Wednesday's trading range has been $0.03 (0.03%), that's slightly above the last trading month's daily average range of $0.03. 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 SHY.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Closing Marubozu. The last time a Bullish Closing Marubozu showed up on August 31st, SHY actually lost -0.08% on the following trading day.
The ETF managed to close above the 20-day moving average at 86.50 for the first time since August 31st.
Although SHY is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 86.51 where further buy stops might get activated. As prices are trading close to September's high at 86.52, upside momentum could speed up should the market mark new highs for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Closing Marubozu" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for SHY. Out of 145 times, SHY closed lower 64.83% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 52.41% with an average market move of -0.02%.