Caution on Financials in this area
April 2, 2008 11:10 AM
There are a number of reversal points on many financials not far above. The March 24th high on XLF was $27.37. While that is technically not an SB number short, there are stocks within that sector that do have numbers in that area. Keep in mind, ETF’s are approximations of indexes (in most cases) and it is possible that the index and the ETF are slightly different. Basically, the ETF number could be slightly exceeded, but not the index or the underlying securities. But if the SB number is exceeded on an ETF, it should at the very least get your attention.
The prudent play here is to probably take a little money off on financials, like 50%, and see if the reversal points clear as the risk reward seems marginal at best. $27.10 on XLF thus far…. I would consider taking half off right here if long yesterday…and wait and see where we are…(Trader’s should exit the long right here at $27.10, IMO)
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