An ETF You Can Bank on in 2011

By
A A A

ProShares Ultra Financials ETF (NYSE: 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.

On March 10, with the stock trading at $63, the Trade of the Day 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 $72.50 to $75.

By mid-April, UYG hit $78, and we advised taking profits. By July, the stock had fallen to under $50. Since then, UYG has formed a strong double-bottom at $48 and is trading within a bull channel following a huge breakout in September.

UYG could be a leader in 2011 with a target of over $75. But it is at the top of its channel and could pull back to below $62, which is our buy point.

The SEC has determined that "ultra" funds are not good long-term investments and are most appropriate for short-term trades. Leveraged ETFs carry greater risk than ordinary ETFs, so traders should use stop-loss orders. Finally, the margin requirement for most leveraged ETFs is 100%, but check with your broker before entering an order.

Trade of the Day - UYG Chart

Trade of the Day Chart Key

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



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



This article appears in: Investing , Stocks

Referenced Stocks: ETF , UYG

Sam Collins

Sam Collins

More from Sam Collins:

Related Videos

Stocks

Referenced

100%
100%

Most Active by Volume

270,887,127
    $93.89 unch
225,243,115
  • $40.93 ▼ 2.74%
135,900,109
  • $47.52 ▲ 1.80%
89,467,924
  • $5.35 ▼ 1.11%
85,105,358
  • $16.95 ▼ 0.53%
80,748,539
  • $39.80 ▼ 4.21%
68,491,586
  • $3.57 ▼ 1.79%
62,097,356
  • $100.96 ▼ 0.82%
As of 9/19/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com