TLT runs into sellers around 165.29 for the third day in a row
iShares 20+ Year Treasury Bond ETF (TLT) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, TLT ended the month 0.21% higher at 163.93 after losing $0.80 (-0.49%) today on high volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 164.38, the ETF confirmed its breakout through the previous session low after trading up to $0.90 below it intraday.
Daily Candlestick Chart (TLT as at Jun 30, 2020):
Tuesday's trading range has been $1.81 (1.1%), that's slightly above the last trading month's daily average range of $1.58. 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 TLT.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on May 15th, TLT lost -2.20% on the following trading day. Notwithstanding a strong opening the market closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 163.48 earlier during the day, TLT bounced off the key technical support level at 163.91 (S1). The failure to close below the support could increase that levels significance as support going forward. The ETF closed back below the 50-day moving average at 164.00. The market ran into sellers again today around 165.29 for the third trading day in a row after having found sellers at 165.27 in the previous session and at 165.32 two days ago.
TLT shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might speed up should prices move above the nearby swing high at 165.32 where further buy stops could get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for TLT. Out of 110 times, TLT closed higher 56.36% 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 63.64% with an average market move of 1.02%.