The Dollar is Reversing to Bullish (NYSE: UDN),(NYSE: UUP)
It may be time for you Dollar Bears, PowerShares DB US Dollar Index Bearish (NYSE:UDN), to give up and make way for the Dollar Bulls, PowerShares DB US Dollar Index Bullish (NYSE:UUP). In reviewing the UUP chart, we see that the stock price has done a couple important things that it has not done in the past 7 months or so. Please refer to the chart below.
- The stock price broke out above the downward trend line (purple diagonal line in the chart). It has done so on some pretty nice volume the past two months, which can be a sign of reversal as mutual and hedge funds buyers are showing their presence.
- The UUP gapped up today, showing strong buying power and demand for the stock.
- The stock is testing the intermediate high set back in the beginning of November at the $23 level. With a little nudge, it may go higher.
- The stock is now trading pretty well above its 20-day and 50-day moving averages.
It seems that folks over at Minyanville might be bullish on the dollar as well. Josh Lipton reports that the dollar is stronger and “The buck is back.” He opines why the dollar is rallying, citing in his article that, “Most of the strength has been against the euro, writes Gluskin Sheff’s David Rosenberg, which has broken down as the world now sees that the region’s fiscal and banking sector woes may be even worse across the pond than stateside.
Ed Yardeni of Yardeni Research echoes that argument, writing in his morning missive that sentiment has turned bearish on the euro because of escalating worries about the credit worthiness of Greece, Ireland, and Spain.”
So, run out and try to get some bang for your buck.
Disclosure: No positions.