TVIX closes below its opening price unable to hold early session gains
VelocityShares Daily 2x VIX Short Term ETN (TVIX) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
TVIX finished the week -10.33% lower at 39.14 after losing $0.86 (-2.15%) today ahead of tomorrow's Presidents' Day market holiday. Trading $1.37 higher after the open, the ETF was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 39.15, the market confirmed its breakout through the previous session low after trading up to $0.27 below it intraday.
Daily Candlestick Chart (TVIX as at Feb 14, 2020):
Friday's trading range has been $1.85 (4.7%), that's below the last trading month's daily average range of $3.83. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TVIX.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on February 3rd, TVIX lost -10.62% on the following trading day.
Prices are trading close to the key technical support level at 38.36 (S1). After having been unable to move lower than 39.15 in the prior session, TVIX found buyers again around the same price level today at 38.88.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 38.33 where further sell stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for TVIX. Out of 95 times, TVIX closed lower 64.21% 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 67.37% with an average market move of -1.71%.