From March 9, banks stocks have experienced a huge price appreciation, Wells Fargo went from 9 to 28 for a 200% plus increase, JP Morgan was around 15 and is now at 38, Bank of America almost quintupled its price climbing from around 3 to almost 15 and Fifth Third was just about at 1 and now is above 8.
The financial sector bullish percent closed Friday at 80 in a territory that is considered high risk, contrary opinion calls for a correction of the financial sector.
The UltraShort Financials ProShares (SKF) is a leveraged short no diversified fund, the investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Dow Jones U.S. Financials index.
In others words this fund goes up if financials goes down.
Since March 9 to march 27 the fund went from 244 to 95 for a 60% loss in less than 3 weeks, the macd line correlated accordingly in that period. From March 27 to April 20 it went from 95 to 70 for a 26% loss, the macd line was bearish in that period but made a bullish crossover at the end.
Since April 20 the fund loss was a 44% to the close on Friday 8, however the macd line started climbing going from the 41 area to 50. We are in the presence of a bullish divergence. This divergences some times reflects a market bottom others time they don’t, nobody is sure of the actual outcome but the probabilities are on a price rebound.
Buy 80 SKF 44 stop 46 limit good until canceled.
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- Erick Stern
- I am a civil engineer who likes charts, to me, speculating in the markets is both a hobby and a second profession and in my view the stock market is the most honest environment, since it is only your knowledge and preparation that matters. I live, and work in the construction industry, in the Dominican Republic. I read and answer all my mail so please feel free to write firstname.lastname@example.org Thanks, Erick