In An Overbought Market, Real Estate ETF Offers a Potential Buy
ProShares UltraShort Real Estate (NYSE: SRS) is among the few oversold ETFs offering a potential buying opportunity. Like most other asset classes, real estate has become overbought. SRS is an inverse fund that gains when real estate declines. While stocks are generally overbought, inverse funds of major stock market indexes are not yet oversold. SRS has a PowerRatings of 9.
PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter trades on stocks with a PowerRatings of 8 or higher with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.
In the past, buying stocks with a rating of 9 on a 3% pullback the next day and selling five days later has been profitable 75% of the time. The average winner has gained 4.3%. Other entries and exits also show high winning percentages and large average gains.
SRS should be considered a buy under $19.98.
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All data is as of the end of day on 1/14/2014.