NEW BULLISH Plays

Proshares Ultra Russell 2000 ETF - UWM - cls: 43.99 chg: -0.14

Stop Loss: TBD
Target(s): 50.00
Current Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The UWM is the double-long (2x) bullish ETF on the Russell 2000 small cap index. Currently it's in the middle of no-man's land with resistance overhead in the $50-52 area and support in the $42 area. You could argue the index is at support near its rising 200-dma. What's important to this trade is that the UWM should see big moves one way or the other.

What I am suggesting tonight is an aggressive, higher-risk, speculative trade. We're betting that lawmakers will come to some sort of agreement by Monday morning. We want to open bullish positions in the UWM on Friday at the closing bell. If there is a deal on Monday then the market and the UWM will likely gap open higher and rally. If there is no deal then the UWM will probably gap open down. That's why we want to keep our position size small to limit our risk.

We will add a stop loss this weekend once we know our entry point.

launch SMALL positions at the close on Friday.

Suggested Position: buy UMW @ close

- or -

buy the AUG $45 call (UWM1120H45)

Annotated chart:

Entry on July 29 at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 2.1 million
Listed on July 28, 2011