Time to Cash Out of This Financial ETF

By Sam Collins,

Shutterstock photo


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. 

UYG Chart  

Chart Legend  

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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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: ETF , UYG

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Sam Collins

Sam Collins

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