ETF Outlook For Thursday, March 13, 2014 (FXI, EWA, XRT, SMH, INTC)

ETF Outlook for Thursday, March 13, 2014

iShares FTSE/Xinhua China 25 Index ETF FXI

A bevy of new economic numbers out of China hit the wires overnight and the trend of slowing economic growth remained the theme. Despite the worse-than-expected numbers the Chinese stock market moved higher last night.

On Wednesday, FXI fell another 0.3 percent before finding support at the February low as it closed well off the intraday low. If FXI can hold $33.50 it could put together a short-term bounce today, however if the support level is breached it could send the ETF down another couple of dollars to test the low from last July.

iShares MSCI Australia Index ETF EWA

The employment number for February was released last night and it came in much better than expected at 47,300 workers hired. This is well above the 15,000 estimate and the 18,000 workers hired in January. The country’s unemployment rate remained unchanged at six percent and the labor force participation rate improved to 64.8 percent.

See also: 4 New ETFs Hit The Market

Due to the country’s ties to commodities and China, EWA has been struggling over the last couple of years. In the last 12 months EWA is down nine percent, but the chart has begun to slowly improve. If EWA can hold above $24.50 it could lead to a bounce to the upper $20s in the coming weeks.

SPDR S&P Retail ETF XRT

The February retail sales number came in better than expected at +0.3 percent versus an estimate of +0.2 percent and the prior reading of -0.4 percent. The ex-auto number was also +0.3 percent. XRT has been on a tear lately, rallying over 12 percent since the low in early February and it is now sitting not far from a fresh all-time high.

If the ETF is able to breakout above the $88.95 level in the next few weeks it would be not only significant for the retail sector, but for the stock market in general.

Market Vectors Semiconductor ETF SMH

The sector outperformed yesterday with a gain of 1.1 percent as SMH closed at the best level in a decade. The volume was extremely light compared to the previous two sessions when the ETF was lower. That being said, the pattern of yesterday’s one-day candlestick on the chart indicated the breakout could lead to higher prices in the days/weeks ahead.

The ETF opened lower and closed at the high of the day suggesting the buyers took control of the ETF throughout the session. Investors should watch the action in Intel INTC, which makes up 19 percent of the ETF, but has been lagging the sector. A close above $25 for INTC and it will rally and take the ETF higher with it.