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Getting ready to breakout: VIX technical analysis

By Nathan Batchelor

11:52, 26 August 2020

The VIX looks set for a major bout of volatility, ahead of the upcoming Jackson Hole economic symposium this week.

VIX analysis shows that a falling wedge pattern is indicating that a spike in market volatility may take place at any time.

VIX medium-term price trend

The CBOE volatility index has been trading around depressed levels recently, however, the Federal Reserve Chair’s upcoming speech at Jackson Hole could cause the index to break higher.

VIX technical analysis shows that a bullish double-bottom appears to be forming, following bears’ inability to break the February low.

VIX medium-term price trend

The daily chart also shows notable price gaps that still need to be filled, following the March 2020 reversal from the 100 level.

Technical analysis shows that the mentioned price gaps on the daily chart are located around the 48 and 60 level. 

Key upcoming resistance for the VIX is located at the 26 and 30 levels.

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VIX short-term price trend

VIX analysis highlights that the short-term bearish trend in the index remains in place while the price trades below the 24 level.

The lower time frames show that a bullish falling wedge pattern has formed, and price is close to breaking out from the wedge.

VIX short-term price trend

Typically, falling wedge patterns are considered to be powerful bullish reversal patterns.

Looking at the size of the pattern, it is indicating that the VIX could move towards the 40 level over the coming days and weeks.

Traders should be aware that a bullish breakout will take place from the falling wedge pattern once price moves above the 43 level.

VIX technical summary

VIX analysis shows that the volatility index could rally towards the 48 area, and close an important price gap on the charts.

Markets in this article

VIX
Volatility Index
16.97 USD
-0.03 -0.180%
VIX
Volatility Index
16.97 USD
-0.03 -0.180%
VIX
Volatility Index
16.97 USD
-0.03 -0.180%
VIX
Volatility Index
16.97 USD
-0.03 -0.180%
VIX
Volatility Index
16.97 USD
-0.03 -0.180%

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