Indicators that an ETF or Stock Will Drop

When it comes to experienced traders, they will use many indicators to determine if a stock will fall.  Since an ETF is a stock that is affected by supply and demand, traders can short, bet a stock will go down in price, an ETF.  Therefore, it is a good idea to look over the top shorted equities to determine if the ETF is in this list.

 

Under Professional Market Indicators to the right, you will see Top TSX Short Positions.  Click on the Top TSX Short Positions menu item and you will get a list of the top shorted equities on the TSX.

After clicking on Top TSX Short Positions, you will see the top short positions which has an ETF, XIU.to, in position number three.  This is an indicator that many traders are betting that the ETF, XIU.to, will drop.

Shorting is a short-term strategy since in the long-term, the equity will most likely go up.  Therefore, there is a good chance that you can buy XIU.to for a cheaper price if you are patient.  Of course, the traders who shorted XIU.to can be wrong and will suffer a loss if XIU.to goes up.

Another index that is used is the TSX fear index.  The lower the number, the more calm the markets will be for the next 30 days.  The higher the number, the more volatile the equities will be for the next 30 days.

The TSX fear index can be wrong, but when combined with other indicators, it can become a useful tool in your equity investing toolbox.

XIU.to dropped from $23.50 on Feb 21 to 22.64 on Mar 21.  If the traders who shorted XIU.to are correct, XIU.to will drop some more.

There are many other indicators that analysts use.  It is a matter of watching or reading the analysts to see his/her favorite indicator(s).

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