UVXY closes lower for the 4th day in a row
ProShares Ultra VIX Short-Term Futures (UVXY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, UVXY finished Wednesday at 20.06 losing $0.13 (-0.64%). Today's close at 20.06 marks the lowest recorded closing price since August 25th. Trading up to $0.70 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on August 31st, UVXY gained 2.60% on the following trading day. 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 Sep 16, 2020):
Wednesday's trading range has been $0.83 (4.15%), that's below the last trading month's daily average range of $2.28. 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. Prices continued to consolidate within a tight trading range between 19.28 and 20.74 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Takuri Line.
Prices are trading close to the key technical resistance level at 20.29 (R1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 20.74 where further buy stops could get activated. Further selling might move prices lower should the market test August's close-by low at 18.75.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for UVXY. Out of 115 times, UVXY closed lower 66.09% 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 71.30% with an average market move of -5.18%.