Trade Entry: ETRACS 2xLeveraged Long Wells Fargo Business Development Company Index ETN
Today I am recommending a buy entry for the ETRACS 2xLeveraged Long Wells Fargo Business Development Company Index ETN (NYSE:BDCL). This Exchange traded note moves up and down at twice the rate of the underlying Wells Fargo BDC index.
This fund has exhibited significant share price swings between quarterly dividend payment dates. The average low to high swing for the last seven quarters is 12%. The BDC sector has sold off over the last few days and the BDCL share price is below the recent ex-dividend price by a typical decline percentage.
The fund should next go ex-dividend around July 10. My target price will be 8% above today’s closing share price.
Recommendation: Buy BDCL at $20.80 or lower. Target price of $22.45, trade will be closed no later than the day before the next ex-dividend date in early July.