LABU closes lower for the 4th day in a row
Direxion Daily S&P Biotech Bull 3X ETF (LABU) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, LABU finished Tuesday at 56.27 edging lower $0.13 (-0.23%) on low volume. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (LABU as at Apr 16, 2019):
Tuesday's trading range has been $2.56 (4.43%), that's below the last trading month's daily average range of $3.85. 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 slightly lower than usual for LABU.
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. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on March 19th, LABU lost -2.89% on the following trading day.
Prices are trading close to the key technical support level at 54.42 (S1).
Although the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the nearby swing low at 54.42 where further sell stops could get triggered. Further selling might move prices lower should the market test March's close-by low at 50.49.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for LABU. Out of 26 times, LABU closed lower 69.23% 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 65.38% with an average market move of -5.89%.