A double short gold fund by Power Shares, could be set up for a short term bounce off the recent lows. Gold is making close to all time highs, and contrarian traders may be looking for a pull back off an impressive run gold has made. ETF’s, especially these double inverse, are best used as day trading devices, not investments in my opinion.
DZZ has made a nice tested MACD crossing on the 30 minute trading chart and bounced off a low of 18.02. We will use 18.01 as a very tight stop loss level. Gold is very volatile to both the upside and downside. We could miss a move in either direction that can just as easily hurt us as help us, but you have to respect the technical signals when trading.
We used the signal to buy off the 30 minute chart test, but we will utilize the 1 minute trading time frame to set up some trading guidelines. The trading range of 18.02 to 18.29 we will use as our wave 1 magnitude and calculate our possible trading profit levels from this as long as our low holds.
From a buy point of 18.39 the probable wave 4 pullback level, we expect to see DZZ trade to a level of 18.99 and 19.75.
The short term trade analysis for DZZ is being tracked in its trading alerts page.