TIP closes above its opening price after recovering from early selling pressure
iShares TIPS Bond ETF (TIP) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
TIP ended the week 0.12% higher at 121.70 after gaining $0.07 (0.06%) today ahead of tomorrow's Memorial Day market holiday. Trading up to $0.10 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (TIP as at May 22, 2020):
Friday's trading range has been $0.27 (0.22%), that's below the last trading month's daily average range of $0.41. 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 TIP.
Prices are trading close to the key technical support level at 121.43 (S1). After having been unable to move lower than 121.53 in the previous session, the market found buyers again around the same price level today at 121.48. The last time this happened on Wednesday, TIP actually lost -0.11% on the following trading day.
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 121.98 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 121.29 where further sell stops might get activated. With prices trading close to this year's high at 123.16, upside momentum could accelerate should TIP be able to break out to new highs for the year. Further buying might move prices higher should the market test April's close-by high at 122.65. As prices are trading close to May's low at 120.61, downside momentum could speed up should the ETF mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for TIP. Out of 681 times, TIP closed higher 49.93% 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 56.39% with an average market move of 0.15%.