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BGZ, EDZ, FAZ, SKF, SRS - Stock Charts to Watch
Charts of the Day video for Tue September 1st 2009
We had a very sharp pullback today, which may have triggered the beginning of a new downtrend. Certainly, the ultra shorts reacted positively today, and I want to go over some of the big ones we follow just to give you an idea where they may be.
Direxion Daily Large Cap Bear 3X Shares (BGZ) had a gap down with a little bit of a downtrend that started in early July that was broken today. Today’s action up 1.68 on 13.7 million, the heaviest volume since early July, was significant because it broke through lateral price resistance up through the 10 and 21-day moving averages and tagged the declining tops line going all the way back to the March high when the stock was 119.00, which indicates to me the possibility that it is breaking out here at 26.02. We need to get a follow through. We’ve seen movement before but not with this kind of volume and not with that kind of thrust, from 23.82 to 26.15, closing at 26.02. The first target around the 27.75 range up near the mid Aug highs, and is also declining moving average coming in at 20.25, so the zone between 27.41- 28.22 is going to be the initial resistance. Beyond that, if it does continue forward, key secondary resistance around 31.50 area would be my secondary target on BGZ.
Direxion Daily Emerging Markets Bear 3X (EDZ), ultra short. In a dramatic decline, having come down from 95.80 to 8.00 and change, the declining tops linetoday, coming off highs from March all the way through to today, bit of a redrawn line, was tested at the close, although we did also get a thrust up through the 10 and 21-day moving averages on the heaviest volume, I believe, ever traded on the EDZ, which has only been around since last Dec or so. A significant day, nonetheless, with immediate overhead resistance at around the 10.50 area where the declining areamoving average is and lateral price resistance at the highs noted on the chart that were in late July and mid Aug are a little bit higher than those highs up around the 10.90 area, so we’re looking at 10.50 and then tested for 10.90. If it busts through that it confirms a breakout and gets us up to 11.80-11.85 area, which would fill the gap from early to mid July, possibly move as high as 12.75 short term. If that should be broken, we could see a potential move up to 16.00-16.50, which is my ultimate target on this one.
Direxion Daily Financial Bear 3X Shares (FAZ), ETF, which had the biggest volume in its history today trading at 108 million shares. That is a strong price volume thrust taking it up to a lateral price resistance just under 24.58, a 10-day moving average slightly above that, a 21-day around 25.00 and closing, virtually, just a few cents off the high for the day. The key is going to be on this one any movement up towards the 28.85 area, that’s a couple, 2 ½ points or so, from the 26.00-27.50 area. A thrust through that would be a breakout, which gets us up toward that 33.00 zone, which is where there’s already a declining 40-day moving average and declining tops line exists, and then there’s a strong lateral price resistance up around 40.00, but that’s a way from where we are, and we’re getting ahead of ourselves. I just wanted to give you those targets that are around 28.80, 33.00 and then possibly the 40.00 range.
UltraShort Financials ProShares (SKF) had a move today that took it up 2 ½ points, almost 10% on 41 million shares, the heaviest volume in 2-2 ½ months, also similarly taking it up to the 10 and 21-day moving averages, but short of the 31.00 target that we would need to get out through to indicate that we may be moving.
So, in the next day or two all of these are going to be important.
UltraShort Real Estate ProShares (SRS), which we currently hold in our model portfolio, which, curiously enough, when most of the other ETFs were making lower lows, this one actually made a slightly higher low, and after going sideways for about seven sessions, this stock exploded out on heavy volume, broke up through the 10 and 21-day moving average across two-week price resistance, and again, this one has key resistance around 13.65. We’ll be watching that tomorrow to see if we can get a follow through to the upside. Secondary target around 14.85 and then beyond that we’re looking at around 17.25.
Direxion Daily Small Cap Bear 3X Shares (TZA), similarly a strong volume surge taking it up through moving averages, but not across price resistance, which currently exists around 16.80 with a declining moving average around 17.25.