“The ProShares UltraShort FTSE/Xinhua China25 (NYSE:FXP) — This ETF seeks daily investment results, before fees and expenses, that correspond to twice the inverse of the daily performance of the FTSE/Xinhua China 25 Index. On May 5, at $42, I said, “The stock has executed a breakaway gap through its 50-day moving average. This is a powerful buy signal with supporting volume and a trading target of $53.” (NYSE:FXP) ran to over $51 before falling to its current support, a double-bottom at $35. And it appears to have executed a saucer bottom. Note that recently this ETF has been picking up buyers,” Sam Collins Reports From Investor Place.
Collins goes on to say, “On July 14, I said, “Buy under $36.50 since a daily reversal would be a strong buy signal with a target of $42.” Yesterday’s breakaway gap is a powerful buy signal that could give (NYSE:FXP) the kick it needs to jump to $42, and then to the top of FXP’s trading range at $49. A word of caution: This ETF is for traders only. As an “ultra fund,” it is constructed to move at twice the inverse rate of the underlying investment. It carries greater risk than an ordinary ETF, so investors should use a stop-loss order. Finally, the SEC has determined that these funds are not good long-term investments and that they are most appropriate for short-term trades. The margin requirement for most leveraged ETFs is 100%.”