ProShares Ultra Financials (UYG) — This exchange-traded fund (ETF) seeks daily investment results that correspond to twice the daily performance of the Dow Jones U.S. Financials Index.
For six months, UYG traded within the confines of a rectangle bounded by support at $5 and resistance at $6.30.
On March 11, I said, “Following a period of very high accumulation, this ETF appears to be breaking from a triangle with supporting evidence of the break coming from the crossing of the 50-day moving average by the 20-day moving average. If successful, the target for a trade in UYG is $7.25 to $7.50.”
For those who bought UYG and made a profit, it is time to cover. This ETF could go higher, so perhaps a trailing stop is best, but there is never anything wrong with taking a profit.
Keep in mind that this “ultra fund” carries greater risk than an ordinary ETF. The SEC has determined that ultra funds are not good long-term investments and that they are most appropriate for short-term trades.
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