SDOW breaks back below 20-day moving average
UltraPro Short Dow30 (SDOW) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
SDOW finished the month -8.78% lower at 21.93 after losing $0.30 (-1.35%) today. Trading $0.93 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (SDOW as at Jul 31, 2020):
Friday's trading range has been $1.10 (4.98%), that's above the last trading month's daily average range of $0.88. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SDOW.
One bearish candlestick pattern matches today's price action, the Shooting Star. The last time a Shooting Star showed up on March 10th, SDOW actually gained 17.44% on the following trading day.
Prices are trading close to the key technical support level at 21.86 (S1). The ETF closed back below the 20-day moving average at 22.04. After having been unable to move above 23.06 in the prior session, UltraPro Short ran into sellers again around the same price level today, failing to move higher than 23.02.
Though SDOW 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 speed up should prices move above the close-by swing high at 23.06 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 21.54 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Its common bearish interpretation has been confirmed for UltraPro Short. Out of 494 times, SDOW closed lower 54.66% 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 67.21% with an average market move of -1.85%.