The US Dollar Index has dropped significantly below its 20-period moving average. We know from experience that stocks have a tendency to move back towards their moving average over time, so this is an opportunity for us to buy UUP with a goal of selling it once it has moved back to the SMA. The other thing we need to pay attention to is the gap above the market. There are two gap targets that are located above the moving average. Once the stock has moved up over the 20-day moving average, it’s important that you trail your stop.
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