Top 6 Picks for March

Top Stock #5: ProShares UltraShort FTSE/Xinhua China 25 (FXP)

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The Options Trader’s Guide to Technical Analysis

The ProShares UltraShort FTSE/Xinhua China 25 (FXP) seeks daily investment
results, before fees and expenses, which correspond to twice the inverse of the daily performance of the FTSE/Xinhua China 25 Index.

FXP appears to be executing a saucer bottom. In late December, the 20-day moving average crossed above the 50-day moving average, known as the “death
cross,” which gave a trading buy signal for this inverse ETF and resulted in a gain of more than 30%.

Now the stochastic has issued a buy signal, and buyers of this very speculative inverse fund could benefit from a trade with a target of $11. 

However, keep in mind that FXP is constructed to move at twice the inverse rate of the underlying investment, so it carries greater risk than an
ordinary ETF. This pick is “for traders only,” as the SEC has determined that “ultra” funds are not good long-term investments. And be sure to use
a stop-loss order.

Test your technical analysis IQ.

Next: Top Stock #6