XLY stuck within tight trading range
Consumer Discret Sel Sect SPDR ETF (XLY) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, XLY ended the week 2.63% higher at 131.69 after losing $0.20 (-0.15%) today on low volume ahead of tomorrow's Presidents' Day market holiday. 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 (XLY as at Feb 14, 2020):
Friday's trading range has been $0.97 (0.73%), that's below the last trading month's daily average range of $1.33. 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 higher than usual for XLY. Prices continued to consolidate within a tight trading range between 131.23 and 132.38 where it has been caught now for the last three trading days.
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 support level at 131.23 (S1). The ETF found buyers again today around 131.33 for the third trading day in a row after having found demand at 131.23 in the previous session and at 131.41 two days ago. The last time this happened on January 14th, XLY actually lost -0.23% 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 132.38 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 131.23 where further sell stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. Its common bullish interpretation has been confirmed for XLY. Out of 63 times, XLY closed higher 53.97% 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 65.08% with an average market move of 0.70%.