ETF Outlook for Wednesday, December 11, 2013 (IGN, PBE, EWA, XLF)
ETF Outlook for Wednesday December 11, 2013
SPDR Financial ETF (NYSE: XLF)
The passage of the Volcker Rule on Tuesday did not have a big impact on the large financial firms. At one point Goldman Sachs (NYSE: GS) was trading at its best intraday level in several years.
XLF finished the day with a minimal loss of 0.3 percent and is not far from a five-year high. The muted reaction could be due to the fact that investors had anticipated the rule was going to be passed at some point. And even more importantly, the large financial firms were prepared for the new rules.
iShares S&P North America Technology-Multimedia Networking ETF (NYSE: IGN)
After the closing bell last night Citi upgraded shares of Qualcomm (NASDAQ: QCOM) and started Cisco (NASDAQ: CSCO)and Brocade (NASDAQ: BRCD) with Sell recommendations. The stocks were moving in the direction of the new calls made by Citi. All three stocks are in the top seven holdings of IGN and make up a combined 22 percent of the entire ETF.
Even though there was both buy and sell recommendations by the firm, there is a high probability the ETF will be on the move today as investors make both bullish and bearish moves.
PowerShares Dynamic Biotech ETF (NYSE: PBE)
After hitting an all-time high two weeks ago, the ETF has pulled back four percent after another 1.1 percent fall yesterday. The chart of PBE is one of the most interesting of the sector ETFs. The pullback has brought the ETF to prices support at $36 and the 50-day moving average that is also in the area.
Add in the ETF moving from overbought and due for some selling to oversold and it appears PBE is ripe for a bounce in the next couple of days. The support area to watch is $35.50 to $36.00.
iShares MSCI Australia ETF (NYSE: EWA)
The last six weeks have not been kind to Australian equities. The ETF is down over 10 percent and yesterday hit a new three month low. Over the last few years the ETF has been a disappointment as falling commodity prices couple with a slowing in China has hurt the Aussie economy.
With the outlook for commodity prices from gold to coal still bearish it could be some time until the land down under is able to recover fully. When compared its peers, in particularly the iShares MSCI New Zealand Investable Market ETF (NYSE: ENZL), the ETF is not a buying opportunity because there are better options in the market.
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