LABU pushes through Wednesday's high
Direxion Daily S&P Biotech Bull 3X ETF (LABU) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, LABU finished Thursday at 23.35 gaining $2.31 (10.98%). Closing above Wednesday's high at 22.67, the market confirmed its breakout through the previous session high after trading up to $1.58 above it intraday.
Daily Candlestick Chart (LABU as at Mar 26, 2020):
Thursday's trading range has been $3.18 (14.79%), that's far below the last trading month's daily average range of $5.22. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for LABU.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a Bullish Short Candle showed up on Tuesday, LABU gained 5.15% on the following trading day.
Although 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.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Its common bullish interpretation has been confirmed for LABU. Out of 55 times, LABU closed higher 52.73% 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 five trading days, showing a win rate of 56.36% with an average market move of 1.14%.