XLI stuck within tight trading range
Industrial Select Sector SPDR ETF (XLI) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
XLI ended the week 7.37% higher at 63.84 after edging lower $0.05 (-0.08%) today on low volume ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (XLI as at May 22, 2020):
Friday's trading range has been $0.79 (1.23%), that's far below the last trading month's daily average range of $1.33. 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 XLI. Prices continued to consolidate within a tight trading range between 63.27 and 64.40 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Hanging Man.
The market found buyers again today around 63.27 for the third trading day in a row after having found demand at 63.41 in the prior session and at 63.47 two days ago. The last time this happened on April 3rd, XLI gained 6.92% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the nearby swing high at 64.40 where further buy stops could get activated. Further buying might move prices higher should the market test April's close-by high at 66.22.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous two Lows" stand out. Its common bullish interpretation has been confirmed for XLI. Out of 82 times, XLI closed higher 62.20% 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 58.54% with an average market move of 0.74%.