UGAZ finds buyers at key support level
VelocityShares 3x Long Natural Gas (UGAZ) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, UGAZ ended the month -30.89% lower at 10.18 after gaining $0.92 (9.94%) today on low volume. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (UGAZ as at Jun 30, 2020):
Tuesday's trading range has been $0.97 (9.35%), that's slightly below the last trading month's daily average range of $1.01. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for UGAZ.
After trading down to 9.52 earlier during the day, the market bounced off the key technical support level at 9.65 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on May 21st, UGAZ gained 2.09% on the following trading day.
Although the ETF is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the nearby swing high at 11.52 where further buy stops could get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for UGAZ. Out of 118 times, UGAZ closed lower 57.63% 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 61.02% with an average market move of -3.88%.
Market Conditions for UGAZ as at Jun 30, 2020
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