UVXY closes lower for the 3rd day in a row
ProShares Ultra VIX Short-Term Futures (UVXY) Technical Analysis Report for Jun 14, 2019 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, UVXY ended the week -3.81% lower at 34.08 after losing $0.48 (-1.39%) today on low volume. Today's close at 34.08 marks the lowest recorded closing price since May 22nd. Trading $0.49 higher after the open, the ETF was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (UVXY as at Jun 14, 2019):
Friday's trading range has been $1.45 (4.15%), that's below the last trading month's daily average range of $1.89. Weekly volatility is also lower, being way 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 previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on March 21st, UVXY gained 17.44% on the following trading day.
Prices are trading close to the key technical resistance level at 34.57 (R1). After having been unable to move lower than 34.03 in the previous session, the market found buyers again around the same price level today at 33.95.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 35.89 where further buy stops might get activated. With prices trading close to this year's low at 30.38, downside momentum could accelerate should UVXY break out to new lows for the year. Further selling might move prices lower should the market test May's nearby low at 31.03.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for UVXY. Out of 65 times, UVXY closed lower 67.69% 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 73.85% with an average market move of -5.26%.