FAS is in a trading range between 52.00 and 53.70. It allows an entry at the bottom for the expected resumption of climb, or as a short-term profit since it seems to touch both levels daily. The beauty of it is an entry at a known point, i.e., 52.00, with a nearby stop-loss point, thus generating an excellent reward-risk ratio. For example, if entry is 52.00, the stop loss is at 51.90, and the target at 53.70, the reward:risk ratio becomes (53.70-52.00):(52.00-51.90), or 1.70:0.10, or 17:1. Outstanding, considering an acceptable minimum is 3:1.
Here is another presentation dramatically illustrating the trading range of FAS--and its mirror twin, FAZ. One can more than imagine trading one, then switching to the other, as each peak and bottom alternately.----------------------------------------------------------------------------------
07/30/09; 08:45: Pre-market action on FAS shows a breakout above the previous resistance line at 53.70. The short correction apparently lasted only four days rather than the expected week. This is bullish, as is the gap up in pre-market this morning. It should try to close the gap by retesting even down to the previous resistance 53.70, now support. That's the entry point. If the gap holds, support would be 54.14, which becomes the entry point. Stop loss would be under whichever becomes the bottom.
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