LABU unable to break through key resistance level


Direxion Daily S&P Biotech Bull 3X ETF (LABU) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team

Highlights

LABU unable to break through key resistance level
LABU closes within previous day's range

Overview

LABU ended the week 5.36% higher at 59.37 after edging higher $0.21 (0.35%) 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 (LABU as at Feb 14, 2020):

Daily technical analysis candlestick chart for Direxion Daily S&P Biotech Bull 3X ETF (LABU) as at Feb 14, 2020

Friday's trading range has been $2.86 (4.81%), that's slightly below the last trading month's daily average range of $2.95. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for LABU.

Three candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern, one bearish pattern, the Northern Doji and one neutral pattern, the Doji. The last time a Bullish Hikkake Pattern showed up on February 7th, LABU gained 4.92% on the following trading day.

Unable to break through the key technical resistance level at 59.55 (R1), the market closed below it after spiking up to 60.20 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.

The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.

Buying could speed up should prices move above the nearby swing high at 61.15 where further buy stops might get activated. With prices trading close to this year's high at 61.30, upside momentum could accelerate should the ETF be able to break out to new highs for the year. Trading close to December's high at 64.35 we might see further upside momentum if potential buy stops at the level get triggered.

Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for LABU. Out of 160 times, LABU closed lower 57.50% 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 55.00% with an average market move of -0.81%.


Market Conditions for LABU as at Feb 14, 2020

Loading Market Conditions for LABU (Direxion Daily S&P Biotech Bull 3X ETF)...
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