I can't believe I'm posting an analysis of FAZ! But here it is - may as well analyze it based on its own merits, eh? Without considering all the bad press it's gotten as a 3x ETF. Let's just take a look at it on its own. It looks like it can have completed a wave down including a small fifth wave from a triangle, and then initiated a wave 1 up with wave 2 pullback. In that case, today's move up can be either be starting a third wave up, or even just the first wave to be followed by yet more - will see. For now, let's keep it simple and conservative. It needs to reach above the prior swing high of $5.50 (and its 50-day moving average), and then mount an effort to and above $6.35. If it can do that, then it may get to where it's doubled, meaning up around $9-10.Might it go higher than that? Perhaps, but please let's not get ahead of the count - there will be some overhang resistance to get past, first. On the "bullish" side, short interest in FAZ has risen (but I don't know the percentage or days to cover). There's also the dynamic that FAZ is not like an ordinary ETF, as everyone should already know by now. My charting of it is not intended to suggest that it's a suitable swing trading vehicle. On the possibility that many people, including many of my readers, may have gotten into FAZ and looking to see whether or not an accumulated position will work out - a rise in FAZ might wind up being just an opportunity to exit with either a profit, or at least less of a loss.
If it falls under $4.52 however, I think stop loss orders will trigger and send it lower. Definitely, it's even riskier under $4.18, especially since its default P&F chart is still dour with a target to $2.50. So, if it falls under $4.52, my response is - bad, bad FAZ! No, no - in the corner, and don't chew up the (newspaper, shoes, neighbor), or bite my ankles, again!
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