Approaching Support: ProShares Ultra S&P500

Published on Friday, 13 July 2012 08:28 Written by TradersHuddle Wire

New York, July 13th (TradersHuddle.com) - Shares of ProShares Ultra S&P500 (NYSE:SSO) finished near calculated support at $50.45.

ProShares Ultra S&P500 (NYSE:SSO) is a fund that seeks daily investment results that correspond to twice the daily performance of the S&P 500 Index. The S&P 500 Index is a measure of large-cap U.S. stock market performance, which includes 500 United States operating companies and real estate investment trusts selected by the S&P U.S. Index Committee through a non-mechanical process that factors criteria, such as liquidity, price, market capitalization and financial viability.

ProShares Ultra S&P500's stock range is defined by its calculated support defined at $50.45 and by the resistance level at $55.67.

The area where we expect for buyers to materialize is defined as calculated support. A stock trading near its support level might see a lift, if it provides the necessary support for traders to place their buy orders. However, if this area is breached, it will signal participants that the stock failed to entice buyers to step in and support the stock, which in turn will spur additional downward momentum.

Traders wanting to establish a position should pay close attention to ProShares Ultra S&P500's price action, and establish it as close to support as possible, but only after buying materializes. Traders should understand that the resistance point at $55.67 might limit their upside, however, if the stock breaks resistance, it could be a good point to step in and add to the position.