UVXY breaks below Thursday's low
ProShares Ultra VIX Short-Term Futures (UVXY) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
UVXY ended the week -8.0% lower at 10.69 after losing $0.21 (-1.93%) today ahead of tomorrow's Presidents' Day market holiday. Trading $0.31 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 10.70, the ETF confirmed its breakout through the prior session low after trading up to $0.06 below it intraday.
Daily Candlestick Chart (UVXY as at Feb 14, 2020):
Friday's trading range has been $0.40 (3.73%), that's below the last trading month's daily average range of $0.77. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for UVXY.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on February 3rd, UVXY lost -8.13% on the following trading day.
Prices are trading close to the key technical support level at 10.52 (S1). After having been unable to move lower than 10.70 in the previous session, UVXY found buyers again around the same price level today at 10.64.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 10.53 where further sell stops could get triggered. With prices trading close to this year's low at 10.40, downside momentum might speed up should the market break out to new lows for the year.
Among the seven 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 509 times, UVXY closed lower 59.92% 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 71.32% with an average market move of -4.90%.