XLF closes above its opening price after recovering from early selling pressure
Financial Select Sector SPDR Fund (XLF) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
XLF finished Monday at 23.68 gaining $0.27 (1.15%). Trading up to $0.16 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 29th, XLF gained 1.15% on the following trading day. Closing above Friday's high at 23.62, the ETF confirmed its breakout through the prior session high after trading up to $0.17 above it intraday.
Daily Candlestick Chart (XLF as at Jun 01, 2020):
Monday's trading range has been $0.45 (1.91%), that's slightly below the last trading month's daily average range of $0.53. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for XLF.
Prices are trading close to the key technical resistance level at 24.17 (R1).
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the close-by swing high at 24.34 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 23.17 where further sell stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for XLF. Out of 625 times, XLF closed higher 52.16% 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 59.68% with an average market move of 0.53%.