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Oxen Group’s Buy of the Day: Ultrashort Proshares Real Estate ETF (SRS)
Courtesy of David Ristau at The Oxen Group
The Oxen Group, for Tuesday, is excited about the prospects for Ultrashort Proshares Real Estate (SRS). The ETF, which is an inverse on the housing sector, should have a nice day due to a number of key fundamental and technical indicators. For the most part, Tuesday is light on economic data and big name moves. That fallout in positive news should create a chance for pullback as investors refocus on the flailing dollar and still increasing treasury bonds, meaning higher interest rates. Further, the auto industry and housing industry report economic data. Kurt Karl, of Swiss Re, said the pending home sales reporting could be bumpy, and most analysts are only expecting an increase of 0.5%, in comparison to March’s 3.2%. Just because construction spending is up does not mean pending home sales are up. The market is looking bearish in futures due to these two hectic sectors ruling the market tomorrow, with futures down in pre-trading. SRS will be a great pickup for this bearish day, especially as the focus will be on housing, and the sector has moved up way too fast, on way too little
news. Technically, the ETF is near a 52 week low, meaning it is poised for a pop. It is oversold, undervalued on RSI, and right at a lower bollinger band. If the data is weak or overshadowed by lower auto sales, this ETF will have a fine day. Watch out for a jump in the morning and get in before 10 AM when the pending sales are announced.
Entry: Recommend buying within first 10-25 minutes after slight pullback.
Exit: We recommend exiting after a 3-6% increase.
Upper Resistance: 19.50
