Take This Volatile ETF to the Bank


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

These shares are highly volatile. In March 2009, this inverse ETF traded at over $260, and now, with financial stocks under pressure, a "V" bottom appears to have formed.

The jump through its 50-day moving average has placed SKF just under the 200-day moving average, and is a challenge to the bearish resistance line at $24, which is the target for a trade.

Even though the immediate target is modest, there is a possibility of a breakout above $24 if the stock market confirms that a new phase of the bear market has begun. If that happens, SKF could break out with $30 as its initial target.

This leveraged inverse ETF is only suitable for short-term trading, not long-term investing. Please check with your broker regarding possible margin restrictions.

SKF Chart

Chart Key

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

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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 The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: ETF , SKF

Sam Collins

Sam Collins

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