Frank Kollar: Time To Buy UUP?
- Technical Market Commentary -
October 19, 2010 (FinancialWire) (By Frank Kollar) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — The PowerShares U.S. Dollar ETF (NYSE: UUP) closed just above all time low on Monday, at $22.32. In fact, the only time UUP has made a lower close was back in November 2009, at $22.07.
Is it time to buy this widely-traded ETF?
On Friday, October 15, UUP had a bullish outside reversal day. On Monday, October 18, shares closed slightly lower, which is not a confirmation of the outside reversal day last week, but with the old saying, “Never try to catch a falling knife” ringing in our ears, we think a long trade in this ETF still has a high-reward low-risk proposition.
By putting a sell stop just below $22.00 per share, the potential for a reversal and strong upside gains is high, while the risk on the downside is only about 2%.
(Go to http://www.financialwire.net/2010/05/01/about-kollar/ for more about Mr. Kollar, and go to http://www.financialwire.net/?s=kllrfby for more of Kollar’s commentaries.)
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