FAZ dominated by bears dragging the market lower throughout the day
Direxion Financial Bear 3X Shares (FAZ) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, FAZ finished the month -9.46% lower at 17.71 after losing $0.84 (-4.53%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 18.47, the market confirmed its breakout through the previous session low after trading up to $0.98 below it intraday.
Daily Candlestick Chart (FAZ as at Jun 30, 2020):
Tuesday's trading range has been $1.25 (6.69%), that's slightly below the last trading month's daily average range of $1.25. 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 FAZ.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on June 25th, FAZ actually gained 9.83% on the following trading day.
While the ETF 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 accelerate should prices move above the close-by swing high at 19.38 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 17.39 where further sell stops might get triggered. With prices trading close to this year's low at 13.74, downside momentum could accelerate should Direxion Financial break out to new lows for the year. As prices are trading close to June's high at 19.71, upside momentum might speed up should FAZ mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bearish for Direxion Financial. Out of 652 times, FAZ closed lower 54.14% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 65.64% with an average market move of -2.17%.