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

67%
100%

Most Active by Volume

64,655,493
  • $17.88 ▼ 1.38%
53,363,101
  • $18.51 ▼ 6.98%
42,789,793
  • $94.01 ▼ 1.26%
40,818,762
  • $121.30 ▼ 0.87%
38,086,152
  • $23.28 ▼ 9.17%
36,103,930
  • $14.20 ▼ 0.77%
31,870,696
  • $14.83 ▼ 1.79%
29,019,850
  • $46.70 ▼ 0.38%
As of 7/31/2015, 04:15 PM

Find a Credit Card

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