XLB rises to highest close ever
Materials Select Sector SPDR ETF (XLB) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, XLB ended Wednesday at 66.38 edging higher $0.05 (0.08%). Today's close at 66.38 marks the highest recorded closing price ever. Trading $0.66 higher after the open, the ETF was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (XLB as at Sep 16, 2020):
Wednesday's trading range has been $0.95 (1.43%), that's slightly below the last trading month's daily average range of $1.07. 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 higher than usual for XLB.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Shooting Star which are both known as bearish patterns.
After having been unable to move lower than 66.30 in the previous session, the market found buyers again around the same price level today at 66.19. The last time this happened on September 10th, XLB gained 1.28% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for XLB. Out of 486 times, XLB closed higher 53.50% 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 60.08% with an average market move of 0.61%.