XLP closes above its opening price after recovering from early selling pressure

Consumer Staples Select Sector SPDR Fund (XLP) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team


XLP closes above its opening price after recovering from early selling pressure
XLP still stuck within tight trading range
XLP closes within previous day's range


XLP finished the month 6.92% higher at 62.70 after losing $0.06 (-0.1%) today. Trading up to $0.59 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 previous day's range, prices missed to decisively move beyond the prior day's trading range.

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

Daily technical analysis candlestick chart for Consumer Staples Select Sector SPDR Fund (XLP) as at Jul 31, 2020

Friday's trading range has been $0.79 (1.26%), that's slightly above the last trading month's daily average range of $0.78. 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 XLP. Prices continued to consolidate within a tight trading range between 61.92 and 62.98 where it has been caught now for the whole last trading week.

One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on June 2nd, XLP actually gained 0.13% on the following trading day.

Prices are trading close to the key technical resistance level at 62.83 (R1).

The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.

Buying could speed up should prices move above the nearby swing high at 62.98 where further buy stops might get activated.

Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for XLP. Out of 84 times, XLP closed higher 55.95% 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 60.71% with an average market move of 0.17%.

Market Conditions for XLP as at Jul 31, 2020

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