XLF pops to highest close ever
Financial Select Sector SPDR Fund (XLF) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
XLF ended the week 0.81% higher at 31.17 after gaining $0.04 (0.13%) today on low volume ahead of tomorrow's Presidents' Day market holiday. Today's close at 31.17 marks the highest recorded closing price ever. Trading up to $0.09 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. 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 (XLF as at Feb 14, 2020):
Friday's trading range has been $0.18 (0.58%), that's below the last trading month's daily average range of $0.31. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for XLF.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 30.96 (S1). After having been unable to move above 31.20 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 31.19. The last time this happened on Monday, XLF actually gained 0.35% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 31.38 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 30.95 where further sell stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for XLF. Out of 534 times, XLF closed higher 52.62% 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 59.55% with an average market move of 0.57%.