DBC finds buyers at key support level
PowerShares DB Commodity Tracking ETF (DBC) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
DBC finished the week 0.83% higher at 14.65 after edging lower $0.01 (-0.07%) today ahead of tomorrow's Presidents' Day market holiday. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (DBC as at Feb 14, 2020):
Friday's trading range has been $0.11 (0.75%), that's slightly below the last trading month's daily average range of $0.12. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DBC. Prices continued to consolidate within a tight trading range between 14.59 and 14.72 where it has been caught now for the last three trading days.
Regardless of a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 14.60 earlier during the day, the ETF bounced off the key technical support level at 14.63 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move lower than 14.62 in the prior session, DBC found buyers again around the same price level today at 14.60. The last time this happened on February 7th, DBC actually lost -0.89% on the following trading day.
Though the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 14.72 where further buy stops might get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for DBC. Out of 373 times, DBC closed higher 60.59% 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 54.96% with an average market move of 0.23%.