XLRE still stuck within tight trading range
Real Estate Select Sector SPDR (XLRE) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
XLRE finished the week 5.55% higher at 32.70 after gaining $0.70 (2.19%) today ahead of tomorrow's Memorial Day market holiday. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 32.27, the ETF confirmed its breakout through the previous session high after trading up to $0.45 above it intraday.
Daily Candlestick Chart (XLRE as at May 22, 2020):
Friday's trading range has been $0.84 (2.62%), that's slightly above the last trading month's daily average range of $0.74. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XLRE. Prices continued to consolidate within a tight trading range between 31.76 and 32.75 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on Monday, XLRE actually lost -1.94% on the following trading day.
The market managed to close above the 20-day moving average at 32.62 for the first time since April 30th. After having been unable to move lower than 31.76 in the prior session, XLRE found buyers again around the same price level today at 31.88.
The ETF shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 32.75 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 31.76 where further sell stops could get activated. As prices are trading close to May's high at 33.51, upside momentum might accelerate should the market mark new highs for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Its common bullish interpretation has been confirmed for XLRE. Out of 73 times, XLRE closed higher 57.53% 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 64.38% with an average market move of 0.55%.