XLV closes within previous day's range after lackluster session
Health Care Select Sector SPDR ETF (XLV) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
XLV ended Monday at 101.99 losing $1.02 (-0.99%) on low volume. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (XLV as at Jun 01, 2020):
Monday's trading range has been $1.13 (1.1%), that's below the last trading month's daily average range of $1.67. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XLV.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical resistance level at 102.77 (R1).
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 100.06. The last time this happened on January 21st, XLV actually gained 0.12% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 103.23 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 100.69 where further sell stops could get activated. With prices trading close to this year's high at 105.08, upside momentum might accelerate should the ETF be able to break out to new highs for the year.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for XLV. Out of 83 times, XLV closed higher 62.65% 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 seven trading days, showing a win rate of 59.04% with an average market move of 0.16%.