LABU rises to highest close since August 17th
Direxion Daily S&P Biotech Bull 3X ETF (LABU) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, LABU ended Wednesday at 59.65 gaining $3.49 (6.21%). Today's close at 59.65 marks the highest recorded closing price since August 17th. Closing above Tuesday's high at 57.54, the ETF confirmed its breakout through the prior session high after trading up to $4.36 above it intraday.
Daily Candlestick Chart (LABU as at Sep 16, 2020):
Wednesday's trading range has been $5.14 (9.02%), that's above the last trading month's daily average range of $4.23. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for LABU.
One bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on Monday, LABU gained 3.03% on the following trading day.
The market managed to close above the 50-day moving average at 57.59 for the first time since August 17th. Prices are trading close to the key technical resistance level at 62.68 (R1).
LABU shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Further buying might move prices higher should the market test August's nearby high at 62.93.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed above last periods high" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for LABU. Out of 249 times, LABU closed lower 51.81% 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 53.41% with an average market move of -0.17%.