XLY breaks back below 20-day moving average
Consumer Discret Sel Sect SPDR ETF (XLY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
XLY ended Wednesday at 148.00 losing $0.83 (-0.56%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 148.06, the market confirmed its breakout through the prior session low after trading up to $0.13 below it intraday.
Daily Candlestick Chart (XLY as at Sep 16, 2020):
Wednesday's trading range has been $2.10 (1.41%), that's slightly below the last trading month's daily average range of $2.42. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XLY.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Despite a strong opening the ETF closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on August 19th, XLY lost -0.15% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
XLY closed back below the 20-day moving average at 148.31. After having been unable to move lower than 148.06 in the prior session, the market found buyers again around the same price level today at 147.93.
Although the ETF is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 150.28 where further buy stops could get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for XLY. Out of 499 times, XLY closed higher 57.11% 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 64.33% with an average market move of 0.76%.