XLK pushes through key technical resistance level
Technology Select Sector SPDR ETF (XLK) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, XLK finished the month 5.68% higher at 110.43 after surging $2.69 (2.5%) today on high volume. Today's close at 110.43 marks the highest recorded closing price ever. Trading up to $1.78 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 24th, XLK gained 1.58% on the following trading day. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (XLK as at Jul 31, 2020):
Friday's trading range has been $2.81 (2.57%), that's above the last trading month's daily average range of $2.11. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XLK.
Buyers managed to take out the key technical resistance level at 109.72 (now S1), which is likely to act as support going forward.
Crossing above the upper Bollinger Band for the first time since July 6th, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 107.38 or signal the beginning of a strong momentum breakout leading to even higher prices.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the upper Bollinger Band" stand out. Its common bullish interpretation has been confirmed for XLK. Out of 76 times, XLK closed higher 60.53% 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 68.42% with an average market move of 0.66%.