The Direxion Financial Bull 3X Shares EFT ( FAS ) and the Direxion Financial Bear 3X Shares EFT ( FAZ ) have been very active over the past six months. The following is technical analysis on Financial Bull ( FAS ) for 4/6/09. Knowing the support and resistance levels of FAS will help you trade FAZ.Fas Support and Resistance Levels - April 6, 2009
Resistance Levels: $7.80, $9.00
Support Levels: $7.00, $6.20, $6.00, $5.20
http://stockcharts.com - Chart
FAS closed over the 50 day moving average for the first time ever today. This is a very bullish signal going into next week. FAS is now ready to retest the previous high of $7.80 where there is a lot of resistance just under $8.00. On the downside, watch for pullbacks into mid $6's to be bought heavily. From here on out, $6.20 is now a major support level since it was the low on Friday. A break below $6.20 would take FAS back to the mid to low $5's with $5.00 being a major support level as well. As you can see from my line on the chart, $5.00 has been the battle ground over the past two months...a gap below this level results in huge downside risk.
Since FAS is in the uptrend, I watch the way FAS is trading to let me know when to get into the Financial Bear 3X ( FAZ ). FAZ is in uncharted territory and if FAS can break $7.80, you could see FAS worth more then FAZ within months.
How have I been trading these two? When FAS has a huge run over several days and breaks down through the low of day, I jump into FAZ for a trade. When FAS gets hit hard for several days, I will buy FAS when it finally breaks through the high of the day. If I see FAS gapping up big on Monday, I will most likely start a position ( for a trade ) in Financial Bear ( FAZ ).
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