Here’s a chart on PST – the ProShares UltraShort of the 7-10 Year Treasury. As you can see it took a huge nose dive back in late 2008, but what I really like here is the huge role support has played at the $51 level nearly to perfection. On four separate occasions, the stock has tested 51-even and each time it has held like a champ. So the question is then, what kind of upside does this stock have? Frankly I don’t know, and I’m not by any means an expert in bonds, which is the underlying asset here. However, I also know a chart, is a chart, is always a chart, and the risk/reward is clearly in my favor here, with minimal risk to the downside – basically, if the $51 level is broken you bail, no questions asked, if not you ride the play all the way up with a stop-loss until it is broken. Simple as that!
Here’s the chart on PST…
