Identifying Trading Opportunities in FNGU

At the outset, my apologies to readers who are on their phones. I forgot to prepare the images at the recommended size, Next time I will be more attentive!

Let’s get some quick definitions out of the way. For example:

What is 3X Leveraged ETN

The +3X ETNs are leveraged notes, which means they are exposed to three times the risk of any decrease in the level of the Index, compounded daily. According to the Bank of Montreal, The return on the MicroSectors FANG & Innovation 3X Leveraged ETNs (3X ETNs) is linked to a three times leveraged participation in the performance of the Index, compounded daily, minus the applicable fees. The ETNs provide levered exposure to the Solactive FANG Innovation Index. The Index is a total return index that tracks the stock prices of 15 large capitalization U.S. technology stocks, including eight specific core components. The ETN seeks a return on the underlying index for a single day. The ETNs are not “buy and hold” investments and should not be expected to provide a leveraged return of the underlying index’s cumulative return for periods greater than a day. Savvy?

OK, let’s try a briefer description. According to MarketWatch (remember, I also contribute to MarketWatch!), The Fund seeks a three times leveraged participation in the daily performance of the NYSE FANG+ Index. The Index is an equal-dollar weighted index designed to represent a segment of the technology and consumer discretionary sectors consisting of highly-traded growth stocks of technology and tech-enabled companies.

Now, let us use Elliott Wave Analysis to see if one could identify trading opportunities in FNGU. Remember, this website only tries to educate you. What follows should NOT be construed as trading recommendations to buy, sell, or hold this index.

As you know from my book “Five Waves to Financial Freedom,” when a 5-wave sequence is finished, we should look for a significant correction. And boy! Did we get a correction here?

Can Wave 3 be shorter than Wave 1? Indeed! The only condition is that the third wave cannot be the shortest of the three impulse waves. In the present case of FNGU, wave 3 is bigger than wave 5.

I have shown a series of charts with helpful comments on identifying turning points in FNGU. This should supplement your knowledge of Elliott Waves. However, if you want to learn how to apply this knowledge in real-time, you may look at my online Elliott Wave course at https://elliottwaves.com.

Until next time, 👋👋👋👋

-Ramki Ramakrishnan