RSI starts the week with agriculture & biotech picks September 27, 2010
Posted by Marlowe Cassetti in DAG, IBB.trackback
Although the market ended down today, RSI found some bright spots. It recommended:
- Buy 523 shares PowerShares DB Agriculture Dble Long ETN (DAG); Stop = -$1.91 Target = +$5.73 Volatility = 7.25%
- Buy 118 shares iShares Nasdaq Biotechnology (IBB); Stop = -$8.46 Target = +$25.37 Volatility = 3.92%
So let’s look at the charts:
DAG is a double leveraged long fund that trades the agriculture markets which are equal percentages of corn, wheat, soybean, and sugar futures contracts. It is structured as an Exchange Traded Note (ETN) that trades the physical commodity futures. Needless to say, it sports a 7.25% volatility and is risky. It has made a spectacular run since late June. But if you are inclined to make a risky investment, wait for a pullback and buy it on a dip … and good luck!
IBB has managed to outperform the overall market since early September (magenta line) and money is flowing into this fund (cyan line). Also this fund trades on high volume which is certainly a plus. This kind of performance indicates biotech is in favor and this might propel IBB higher. Again, wait for a pullback before investing in this fund.
Catch you later.
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