TIP closes below its opening price unable to hold early session gains
iShares TIPS Bond ETF (TIP) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, TIP finished Thursday at 119.86 gaining $0.61 (0.51%). Trading $1.44 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on March 18th, TIP actually gained 1.94% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (TIP as at Mar 26, 2020):
Thursday's trading range has been $2.24 (1.86%), that's slightly below the last trading month's daily average range of $2.72. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for TIP.
One bearish candlestick pattern matches today's price action, the Shooting Star.
Prices are trading close to the key technical support level at 118.74 (S1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 123.16, upside momentum could speed up should the ETF be able to break out to new highs for the year.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "6 Consecutive Higher Closes" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for TIP. Out of 21 times, TIP closed lower 71.43% 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 57.14% with an average market move of -0.31%.