Get Positioned for a Market Reversal


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ProShares UltraShort MSCI Emerging Markets Fund ( EEV ) -- This 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 ( EEM ). It should be used only by traders as a bear market investment since its objective is to short stocks in emerging markets. 

EEV Chart  

Chart Legend  

We've traded this ETF with some success at high probability reversal points. We could be at such a point now since there are indications of a reversal down for the market this week. 

Positions taken below $10.50 could result in a move to $12 or higher.

But remember, this is an "ultra fund," which means that it is constructed to move at twice the inverse rate of the underlying investment. Therefore, it carries greater risk than an ordinary ETF, so use a stop-loss order when investing in it. 

The SEC has determined that ultra funds are not good long-term investments and are most appropriate for short-term trades.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Investing Ideas
Referenced Stocks: EEV , ETF

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Sam Collins

Sam Collins

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