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Alternative Investment Could Return 6% in Next 6 Weeks

While not typically a trading vehicle, FAX currently offers an interesting opportunity


Aberdeen Asia-Pacific Income Fund (FAX) — This close-end fund invests at least 80% of its assets in debt securities from Australia, New Zealand and Asia. It currently yields 6.7% and pays its dividend monthly.

The small amount of U.S. holdings makes this fund an excellent hedge against a decline in the U.S. dollar. FAX has a net asset value (NAV) of $6.73, so it is currently trading at a 7.4% discount to NAV. 

Although not typically a trading vehicle, but rather a place to park money, right now FAX has many positive technical characteristics that could offer investors an attractive opportunity in an uncertain market.

It is completing a saucer (rounding bottom) formation, and last week, it flashed a golden cross with the 50-day moving average crossing above the 200-day. The October high at $6.61 is the six-week target. Eventually, it could trade back up to its January 2013 highs near $8.

FAX Chart
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Chart Key

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