XLB runs into sellers again around 46.14
Materials Select Sector SPDR ETF (XLB) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, XLB ended Thursday at 45.92 gaining $2.06 (4.7%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 45.63, the ETF confirmed its breakout through the prior session high after trading up to $0.51 above it intraday.
Daily Candlestick Chart (XLB as at Mar 26, 2020):
Thursday's trading range has been $1.85 (4.17%), that's below the last trading month's daily average range of $2.78. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for XLB.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
Prices are trading close to the key technical resistance level at 46.54 (R1). After having been unable to move above 45.63 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 46.14. The last time this happened on March 20th, XLB lost -5.73% on the following trading day.
While XLB is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for XLB. Out of 492 times, XLB closed higher 54.88% 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 nine trading days, showing a win rate of 55.08% with an average market move of 0.04%.