XLB closes within previous day's range
Materials Select Sector SPDR ETF (XLB) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
XLB finished the month 7.12% higher at 60.36 after edging higher $0.06 (0.1%) today. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (XLB as at Jul 31, 2020):
Friday's trading range has been $0.91 (1.51%), that's slightly below the last trading month's daily average range of $0.97. 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 slightly lower than usual for XLB.
Two candlestick patterns are matching today's price action, the Takuri Line which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Takuri Line showed up on March 13th, XLB actually lost -11.01% on the following trading day.
Prices are trading close to the key technical resistance level at 61.12 (R1).
Although the ETF is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for XLB. Out of 201 times, XLB closed higher 53.73% 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 55.72% with an average market move of -0.05%.