Bank on Financials’ Sell-off

By Sam Collins,

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ProShares UltraShort Financials ETF  (NYSE: SKF ) - This exchange-traded fund (ETF) seeks to achieve results that are twice the inverse of the daily performance of the Dow Jones U.S. Financial Index.

SKF is extremely volatile. In March 2009, this inverse ETF traded at over $260, but is now below $20.

The recent jump through its 50-day moving average means that a challenge to the bearish resistance line at $22.50 is possible, and a small head-and-shoulders break on the S&P 500 would give SKF a push. Since the stochastic is overbought, try to buy SKF below $19 with a target of $22 to $23.

This leveraged ETF is only suitable for short-term trading, not long-term investing. Please check with your broker regarding possible margin requirements. And, recognizing the high risk of this trade, place a stop-loss order at the time of execution.

Trade of the Day - SKF Chart

Trade of the Day Chart Key

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

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 Stocks
Referenced Stocks: ETF , SKF

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