Is the BBOZ Share Price Ready for an Upwards Swing?

The share price of BetaShares Australian Equities Strong Bear Hedge Fund [ASX:BBOZ] is up 2.48% at time of writing to trade at $8.26.

We last looked at the BBOZ share price earlier this month.

Since then, the bear fund has continued to lose ground as the ASX recovers its losses.

But this could soon change if the ‘V-shaped recovery’ begins to lose momentum.

As unemployment and debt start to mount, what will this mean for the stock market?

And how does this effect the BBOZ share price?

ASX BBOZ Share Price Chart


Sobering realisation

Australians are slowing beginning to realise the size of the hole we must now dig ourselves out of.

The Treasury has forecast the biggest budget deficit since the Second World War.

Around $180 billion this year, to be precise.

And with the jobless rate tipped to be almost one in 10 by Christmas, the full impact of COVID-19 remains to be seen.

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When we took a look at BBOZ back in June, we talked a bit about how unsettling the massive amount of cash being pumped into the economy is.

The point: that all this debt-funded growth could unwind in a financial crisis.

With Australia’s credit rating spared (for now), how will it fare into the future?

With all this uncertainty and anxiety, the BBOZ price decline seems to be flattening out.

The weighted moving averages have begun to converge.

Meaning we could see a potential ‘buy signal’ if the 10-day average crosses above the 30-day average.

BBOZ share price into the future

I don’t think it’s a stretch to say there are more bad days on the ASX to come as Australia navigates this pandemic.

A prospect that will drive interest in BBOZ shares.

Ultimately, the share price will depend on how investors view the coming weeks and months.

Like I said, the ASX recovery looks to be slowing — but is not bearish yet.

If the economy begins to buckle under its current strain and things head south, then BBOZ is a way to capitalise on this.

But if the Morrison government manages to right the ship and successfully steer us out of economic disaster, then BBOZ could be a flop.

It depends on what you are convinced will happen.

Our editor and market expert, Vern Gowdie, has a few insights as to what a post-COVID economy might look like.

Vern also outlines the step you can take to protect yourself through this current phase of the pandemic.

Check them out here and here.

Kind regards,

Lachlann Tierney

The Rum Rebellion

Lachlann Tierney is a writer for The Rum Rebellion and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. 

The Rum Rebellion