UVXY finds buyers again around 47.00
ProShares Ultra VIX Short-Term Futures (UVXY) Technical Analysis Report for Feb 13, 2019 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, UVXY ended Wednesday at 47.69 edging lower $0.25 (-0.52%). Today's close at 47.69 marks the lowest recorded closing price since October 9, 2018. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (UVXY as at Feb 13, 2019):
Wednesday's trading range has been $1.53 (3.23%), that's far below the last trading month's daily average range of $3.31. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for UVXY.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on October 29, 2018, UVXY actually lost -5.21% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 47.00 earlier during the day, the ETF bounced off the key technical support level at 47.28 (S1). The failure to close below the support might increase that levels significance as support going forward. After having been unable to move lower than 47.03 in the prior session, the market found buyers again around the same price level today at 47.00.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Trading close to December's low at 46.17 we could see further downside momentum if potential sell stops at the level get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Outside Bar" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for UVXY. Out of 90 times, UVXY closed lower 65.56% 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 75.56% with an average market move of -9.29%.