ProShares UltraShort Semiconductors ETF (NYSE: SSG) — This ETF seeks daily investment results that are twice the inverse of the daily performance of the Dow Jones U.S. Semiconductor Index.
After falling from a high of over $90 in February 2009, this inverse ETF appears to be forming a solid bottom.
In early May, SSG broke through its bearish resistance line, and for four months, it consolidated between $15 and $19 under a compound top. A break through the top in early August drove SSG to the $21 zone, but it quickly reversed and fell to the important support line at the 50-day moving average.
But instead of holding there, the market rallied and SSG fell. It is now close to major support, and with new signals that the overall market may be due for a pullback, this could be the ideal time for a quick trade in SSG.
The immediate target is the 50-day moving average at $17.50, but a trade to $19 looks possible.
Protect all leveraged ETF positions with stop-loss orders, and keep in mind that they are speculative trading vehicles that entail unique risks over periods as short as a single day.
The SEC warns that they are not suitable for all investors, especially long-term investors. Results can be affected substantially by compounding, and returns over longer periods will likely differ in amount and even direction, so these products require active monitoring and management.
If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net.
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