TIP closes below its opening price unable to hold early session gains
iShares TIPS Bond ETF (TIP) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
TIP ended Wednesday at 126.51 flat. Trading $0.15 higher after the open, the ETF was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Monday, TIP actually gained 0.07% 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 Sep 16, 2020):
Wednesday's trading range has been $0.35 (0.28%), that's slightly below the last trading month's daily average range of $0.42. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TIP. Prices continued to consolidate within a tight trading range between 126.31 and 126.82 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern.
Though the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the close-by swing low at 126.33 where further sell stops might get activated. With prices trading close to this year's high at 127.28, upside momentum could speed up should TIP be able to break out to new highs for the year. As prices are trading close to September's low at 126.11, downside momentum might accelerate should the ETF mark new lows for the month.
Among the four 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. While it is usually interpreted as bearish, it has actually shown to be bullish for TIP. Out of 582 times, TIP closed higher 52.41% 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 59.28% with an average market move of 0.19%.