Since BEARX is an open-end mutual fund that holds a portfolio of treasuries, about eighty short positions in different stocks, and various option positions (mostly index puts), I wonder how it can be a candidate for technical analysis.
There's no way for anyone to accumulate the stock, sell it short, sell it, or write options on it as can be done with, say, PDG. So how can technical analysis tell anything at all? The only thing is that to some extent BEARX is an inverse proxy for the NASDAQ, or an average between the NASDAQ and SOXX. It also tracks inversely the T. Rowe Price Science/Technology fund. Also, since the portfolio turnover is better than 400%, few investors can know at any moment exactly what it is tracking. The price of BEARX is largely just an inverse measure of the general movement of the market (though the management does somewhat better than that).
To me, looking at the chart pattern of BEARX is like looking at a road map of where you have come from and trying to guess where the road goes after it goes off the edge of map.
On the other hand, if you think that most stocks are overvalued and feel that a significant (25% or better) downturn is coming, BEARX is a comfortable buy and hold. |
