XLI finds buyers again around 73.05
Industrial Select Sector SPDR ETF (XLI) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
XLI finished the week -6.37% lower at 73.90 after gaining $0.49 (0.67%) today on high volume. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (XLI as at Oct 12, 2018):
Friday's trading range has been $1.76 (2.36%), that's far above the last trading month's daily average range of $0.98. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for XLI.
Prices are trading close to the key technical resistance level at 74.06 (R1). After having been unable to move lower than 73.20 in the prior session, the ETF found buyers again around the same price level today at 73.05. The last time this happened on October 2nd, XLI gained 0.42% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 78.34.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for XLI. Out of 124 times, XLI closed higher 61.29% 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 61.29% with an average market move of 0.84%.