UVXY finds support at 20-day moving average
ProShares Ultra VIX Short-Term Futures (UVXY) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
UVXY finished the week 0.27% higher at 36.54 after gaining $0.61 (1.7%) today. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (UVXY as at May 17, 2019):
Friday's trading range has been $2.85 (7.51%), that's slightly below the last trading month's daily average range of $2.99. 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 higher than usual for UVXY.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. The last time this happened on Wednesday, UVXY lost -6.09% on the following trading day.
After trading as low as 35.12 during the day, the ETF found support at the 20-day moving average at 35.52. After having been unable to move lower than 35.37 in the previous session, the market found buyers again around the same price level today at 35.12.
Though UVXY is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 30.38, downside momentum could accelerate should the ETF break out to new lows for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for UVXY. Out of 475 times, UVXY closed lower 60.42% 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 71.16% with an average market move of -4.87%.