TVIX breaks below Wednesday's low
VelocityShares Daily 2x VIX Short Term ETN (TVIX) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
TVIX finished Thursday at 330.00 losing $59.15 (-15.2%) on low volume. Closing below Wednesday's low at 350.00, the market confirmed its breakout through the previous session low after trading up to $31.80 below it intraday.
Daily Candlestick Chart (TVIX as at Mar 26, 2020):
Thursday's trading range has been $62.84 (16.95%), that's slightly below the last trading month's daily average range of $120.07. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for TVIX.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on Monday, TVIX lost -17.97% on the following trading day.
Prices are trading close to the key technical support level at 225.51 (S1). The ETF closed below the 20-day moving average at 345.29 for the first time since February 20th.
Although TVIX is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the nearby swing high at 421.90 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 225.51 where further sell stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Its common bearish interpretation has been confirmed for TVIX. Out of 719 times, TVIX closed lower 61.34% 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 72.04% with an average market move of -4.76%.