XLB closes lower for the 2nd day in a row
Materials Select Sector SPDR ETF (XLB) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, XLB finished the week 4.05% higher at 52.93 after edging lower $0.08 (-0.15%) today on low volume ahead of tomorrow's Memorial Day market holiday. 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 (XLB as at May 22, 2020):
Friday's trading range has been $0.51 (0.96%), that's far below the last trading month's daily average range of $1.04. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XLB.
Three candlestick patterns are matching today's price action, the Hanging Man and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji. The last time a Northern Doji showed up on March 27th, XLB actually gained 3.19% on the following trading day.
Prices are trading close to the key technical resistance level at 53.74 (R1).
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the nearby swing high at 54.10 where further buy stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Its common bearish interpretation has been confirmed for XLB. Out of 70 times, XLB closed lower 60.00% 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 55.71% with an average market move of -0.54%.