FAZ Weekly Options Trade Analysis
The investment seeks daily investment results, before fees and expenses, of 300% of the inverse of price performance of the Russell 1000Â® Financial Services Index. The fund normally creates short positions by investing at least 80% of net assets in financial instruments that, in combination, provide leveraged and unleveraged exposure to the index. It is non-diversified.
Trade Recommendations—we have a cup and handle pattern formation that signifies a continuation pattern. Weekly Option Trading should keep focus on a continued move up in the stock but watch for breakouts. There are possible signs that money has flowed in this and
momentum of money entering may be on the decline soon. This means our top will have been reached. Be aware of this as we trade your weekly options.
Bollinger Bands— the FAZ has been challenging the top of the bands as of late. We have seen a double push through the bands and this double top is a good indication that it will bounce back down now. Since the FAZ reacts positively to a negative market, we could have signs of a rise in financials coming soon, if only for a moment! Weekly option trading should keep this in mind.
RSI—The RSI has shown that FAZ has been very healthy and bullish for quite a while, this means falling financials. We continue to have a support level just below the ‘50’ mark and have mirrored the stock, pushing up and rising a bit higher as of late. This could mean financials will continue lower but we are absolutely trading in a very healthy bullish pattern here.
On Balanced Volume—Faz has ever increasing volume and when volume increases like it has, demand goes up and so does the cost of the stock. Presently we have a slight Symmetrical Triangle pattern forming. This tends to be a continuation pattern of rising volume. More and more people are getting into FAZ as Financial Stocks continue to fall. Bullish weekly option trading would be considered a money maker here.
Money Flow— Volume is increasing, but money is going out of FAZ . The key to what is happening here is to watch support. Big money could have flowed in already and the rest are individuals. If we break support on our trendline, watch the OBV and see if it also starts down, this very well could mean the beginning of financial stocks building a bottom and not moving down anymore.
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