ProShares UltraShort MSCI Emerging Markets Fund (EEV) — This double inverse exchange-traded fund (ETF) seeks daily investment results that correspond to twice the inverse of the daily performance of the MSCI Emerging Markets Index.
This fund, which normally invests at least 80% of assets in financial instruments with economic characteristics that are inverse to those of the index, should be used only by traders as a bear market investment since its objective is to short stocks in emerging markets.
On April 16, EEV gave its first meaningful buy signal when it gapped on high volume from $47 and ran to over $50. A pullback to $46.70 set the next low of the bull channel.
EEV could reverse swiftly back to the 20-day moving average, now at $47.70, and that would be our buy point for a quick trade to $53.
Leveraged ETFs carry greater risk than ordinary ETFs, so investors should use stop-loss orders. And the SEC has determined that “ultra” funds are most appropriate for short-term trades and are not good long-term investments.
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