SHM (SPDR Lehman Short Term Municipal Bond) ETF has formed a clear rectangle formation. It closed higher yesterday right at resistance of the rectangle.
The recent down trend from the September 30th high found support at 23.78, the exact same price support level hit on September 1st, and also the 50% retracement level of the uptrend started in mid-June.
SHM Rectangle Formation
Regardless of which way price breaks out of the rectangle it is easy to identify given the clear levels of support and resistance.
Top resistance = 23.86
Support = 23.78
This ETF is due for a retracement to the upside after the recent three week down trend. So far, it no longer has lower lows and volume has declined as downside momentum declined.
Given the open at the low of yesterday’s range and close at the high it wouldn’t be surprising to see a break upward.
