Direxion Daily Financial Bear 3X Shares (NYSE: FAZ) — This exchange-traded fund (ETF) seeks daily investment results, before fees and expenses, of 300% of the inverse of the Russell 1000 Financial Services Index. The fund normally creates short positions by investing at least 80% of net assets in financial instruments that, in combination, provide leveraged and unleveraged exposure to the index.

I know that I’ll get some e-mails on this recommendation, saying, “What happened to the long Direxion Daily Financial Bull 3X Shares (NYSE: FAS) Trade of the Day on Jan. 4?” 

Well, our target for FAS was $32, and the ETF made it to $31.60 on Jan. 13. Please keep in mind that the Trade of the Day does not manage fee-based investment programs, nor do I send e-mails when goals are met or I think liquidations should be made. Therefore, you must aggressively monitor and manage your speculative positions. 

As for FAZ, a pop above the 20-day moving average, now at just above $9, would signal a run to the 50-day moving average at $10.35. Traders should exercise patience and try to buy FAZ under $8.60. It is not wise to chase inverse funds — let them come to you. 

Leveraged ETFs seek to deliver multiples of the performance of a benchmark, while inverse ETFs seek to deliver the opposite of the performance of a benchmark. These ETFs entail unique risks, including, but not limited to: the use of leverage, aggressive and complex investment techniques, and the use of derivatives. Returns over longer periods will likely differ in amount and even direction of the underlying.

These products are not suitable for all investors. They require active monitoring and management. Stop-loss orders should be used to protect against losses.

If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net.