SPXL breaks back above 20-day moving average
Direxion Daily S&P 500 Bull 3X Shares (SPXL) Technical Analysis Report for Jul 02, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, SPXL ended Thursday at 43.25 gaining $0.66 (1.55%) ahead of tomorrow's Independence Day OBS market holiday. Trading $0.59 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on June 23rd, SPXL lost -7.59% on the following trading day.
Daily Candlestick Chart (SPXL as at Jul 02, 2020):
Thursday's trading range has been $1.74 (3.94%), that's below the last trading month's daily average range of $2.43. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SPXL.
The ETF managed to close back above the 20-day moving average at 42.71 for the first time since June 23rd. Prices are trading close to the key technical resistance level at 44.00 (R1).
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Direxion Daily. Out of 325 times, SPXL closed higher 54.77% 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 10 trading days, showing a win rate of 66.46% with an average market move of 1.83%.