TVIX finds buyers around 150.36 for the forth day in a row
VelocityShares Daily 2x VIX Short Term ETN (TVIX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
TVIX ended the week -14.1% lower at 151.27 after edging lower $2.33 (-1.52%) today ahead of tomorrow's Memorial Day market holiday. Trading $4.50 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 Wednesday, TVIX actually gained 2.74% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (TVIX as at May 22, 2020):
Friday's trading range has been $10.63 (6.79%), that's below the last trading month's daily average range of $23.75. 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 TVIX. Prices continued to consolidate within a tight trading range between 146.62 and 171.00 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
The ETF was bought again around 150.36 after having seen lows at 146.62, 148.81 and 149.37 in the last three trading sessions. Obviously there is something going on at that level.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might speed up should prices move above the nearby swing high at 171.00 where further buy stops could get activated. Selling might accelerate should prices move below the close-by swing low at 146.62 where further sell stops could get triggered. Trading close to March's low at 89.01 we might see further downside momentum if potential sell stops at the level get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous three Lows" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for TVIX. Out of 26 times, TVIX closed lower 50.00% 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 80.77% with an average market move of -6.48%.