XLB pushes through Monday's high
Materials Select Sector SPDR ETF (XLB) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, XLB finished the month 1.62% higher at 56.35 after gaining $0.80 (1.44%) today. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Monday's high at 55.79, the market confirmed its breakout through the previous session high after trading up to $0.89 above it intraday.
Daily Candlestick Chart (XLB as at Jun 30, 2020):
Tuesday's trading range has been $1.48 (2.67%), that's slightly above the last trading month's daily average range of $1.31. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XLB.
One bullish candlestick pattern matches today's price action, the White Candle.
The ETF managed to close back above the 200-day moving average at 55.70 for the first time since June 23rd. After spiking up to 56.68 during the day, XLB found resistance at the 20-day moving average at 56.63. The last time this happened on April 2nd, XLB lost -2.40% on the following trading day.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the close-by swing high at 56.97 where further buy stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for XLB. Out of 41 times, XLB closed higher 68.29% 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 56.10% with an average market move of 0.92%.