Retail Stocks Are Out, This ETF Is In

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ProShares UltraShort Consumer Goods (NYSE: SZK ) -- This exchange-traded fund ( EFT ) seeks to mirror twice the inverse of the daily performance of the Dow Jones U.S. Consumer Goods Index. Recent economic reports indicate that consumer confidence is falling, so this reverse ETF should advance as the retail group falls. 

  SZK Stock Chart

Chart Legend   

A huge saucer formation is evident with a possible breakout at just over yesterday's close at $42.60. Heavy accumulation has accompanied the recent advance, and even though the index is somewhat overbought, a breakout could take prices much higher. Buy on a breakout above $43 with a target of $50.

A word of caution: This "ultra fund" is for traders only. The SEC has determined that they are not good long-term investments and are most appropriate for short-term trades. Because it carries greater risk than an ordinary ETF, 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.

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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 Symbols: EFT , SKZ

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