UVXY dominated by bears dragging the market lower throughout the day


ProShares Ultra VIX Short-Term Futures (UVXY) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team

Highlights

UVXY dominated by bears dragging the market lower throughout the day
UVXY breaks below Wednesday's low

Overview

UVXY finished Thursday at 59.18 losing $8.82 (-12.97%) on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 62.30, the market confirmed its breakout through the prior session low after trading up to $4.30 below it intraday.

Daily Candlestick Chart (UVXY as at Mar 26, 2020):

Daily technical analysis candlestick chart for ProShares Ultra VIX Short-Term Futures (UVXY) as at Mar 26, 2020

Thursday's trading range has been $8.23 (12.65%), that's slightly below the last trading month's daily average range of $14.46. 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 notably higher than usual for UVXY.

One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on Monday, UVXY lost -13.63% on the following trading day.

Prices are trading close to the key technical support level at 46.09 (S1). Prices are trading close to the key technical resistance level at 72.02 (R1).

Although the ETF is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.

Buying could accelerate should prices move above the nearby swing high at 72.02 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 46.09 where further sell stops might get activated.

Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Its common bearish interpretation has been confirmed for UVXY. Out of 630 times, UVXY closed lower 60.63% 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 70.95% with an average market move of -4.30%.


Market Conditions for UVXY as at Mar 26, 2020

Loading Market Conditions for UVXY (ProShares Ultra VIX Short-Term Futures)...
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