XLU crashes -1.76% closing $1.05 lower
Utilities Select Sector SPDR Fund (XLU) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, XLU ended the week -0.7% lower at 58.52 after tanking $1.05 (-1.76%) today. This is the biggest single-day loss in over a month. Today's close at 58.52 marks the lowest recorded closing price since July 15th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 59.10, the market confirmed its breakout through the previous session low after trading up to $0.71 below it intraday.
Daily Candlestick Chart (XLU as at Sep 18, 2020):
Friday's trading range has been $1.21 (2.03%), that's slightly above the last trading month's daily average range of $1.02. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XLU.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 58.39 earlier during the day, the ETF bounced off the key technical support level at 58.47 (S1). The failure to close below the support could increase that levels importance as support going forward. XLU closed below the 100-day moving average at 58.71 for the first time since September 1st. When this moving average was crossed below the last time on September 1st, XLU actually gained 3.11% on the following trading day.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
As prices are trading close to September's low at 58.34, downside momentum might speed up should the ETF mark new lows for the month.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for XLU. Out of 248 times, XLU closed higher 53.63% 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 65.73% with an average market move of 0.48%.