August Technical Analysis – FAS

July’s Commentary:

I set a limit for my portfolio risk percentage at 5% or less  per trade, and the largest 1 month drawdown for FAS is 75%.  Those two figures work out to a position size of ~$5,000 or less. With the current price around $25 per share, it was one of the few leveraged ETFs with the liquidity AND option premiums I need to meet my cashflow goals.

Good thing I set a limit to $5,000 per share! I knew that FAS was in a downtrend…I just didn’t expect a massive acceleration. Live and learn. FAS already took out the near term low, so as with EDC, there isn’t too much in terms of support to discuss. There is some resistance around 15, but who knows when we’ll test that level again.

One the plus side, the FAS position was small enough that I don’t have to adjust my position size. FAS will be a good experiment. I want to see how long it will take me to break even, considering the underlying position has lost about 50%.


About T. Knight
Blogging about my journey to financial independence via investing for cashflow.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: