XLK stuck within tight trading range
Technology Select Sector SPDR ETF (XLK) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
XLK ended the week 2.28% higher at 101.96 after gaining $0.44 (0.43%) today on low volume ahead of tomorrow's Presidents' Day market holiday. Today's close at 101.96 marks the highest recorded closing price ever. Trading up to $0.33 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 Wednesday, XLK actually lost -0.27% on the following trading day. 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 (XLK as at Feb 14, 2020):
Friday's trading range has been $0.74 (0.73%), that's far below the last trading month's daily average range of $1.29. 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 XLK. Prices continued to consolidate within a tight trading range between 100.82 and 102.13 where it has been caught now for the last three trading days.
Buyers managed to take out the key technical resistance level at 101.90 (now S1), which is likely to act as support going forward. After having been unable to move above 102.05 in the previous session, the ETF ran into sellers again around the same price level today, failing to move higher than 102.13.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. Its common bullish interpretation has been confirmed for XLK. Out of 241 times, XLK closed higher 55.60% 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 62.24% with an average market move of 0.51%.