XLF finds buyers at key support level

Financial Select Sector SPDR Fund (XLF) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team


XLF closes above its opening price after recovering from early selling pressure
XLF finds buyers at key support level
XLF finds buyers again around 23.71
XLF closes within previous day's range


XLF finished the month 3.85% higher at 24.03 after edging higher $0.01 (0.04%) today. Trading up to $0.30 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.

Daily Candlestick Chart (XLF as at Jul 31, 2020):

Daily technical analysis candlestick chart for Financial Select Sector SPDR Fund (XLF) as at Jul 31, 2020

Friday's trading range has been $0.35 (1.46%), that's slightly below the last trading month's daily average range of $0.41. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XLF.

Three candlestick patterns are matching today's price action, the Bullish Spinning Top, the Takuri Line and the Tweezer Bottom which are known as bullish patterns. The last time a Tweezer Bottom showed up on April 3rd, XLF gained 7.18% on the following trading day.

After trading down to 23.71 earlier during the day, the ETF bounced off the key technical support level at 23.75 (S1). The failure to close below the support could increase that levels significance as support going forward. After having been unable to move lower than 23.71 in the prior session, XLF found buyers again around the same price level today at 23.71.

Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.

Buying might speed up should prices move above the close-by swing high at 24.49 where further buy stops could get triggered.

Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for XLF. Out of 406 times, XLF closed higher 63.79% 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 60.59% with an average market move of 0.49%.

Market Conditions for XLF as at Jul 31, 2020

Loading Market Conditions for XLF (Financial Select Sector SPDR Fund)...
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