ETF Outlook For Friday, May 16, 2014 (CARZ, IYZ, GREK, GDX)
ETF Outlook for Friday, May 16, 2014
First Trust NASDAQ Global Auto ETF (NASDAQ: CARZ)
April European car registrations increased by 4.2 percent to 1.13 million from 1.08 million a year ago, the slowest pace in five months. The data adds to a recent flurry of economic numbers out of the region suggesting that the turnaround has been hitting some turbulence.
Auto sales in Germany, which make up about one-fourth of all deliveries, were down 3.6 percent in April. Despite not great news about the autos as a whole recently, CARZ has been able to hold up well. The key is for CARZ to continue to stay above the $38 level to keep it from breaking the current consolidation.
iShares U.S. Telecommunications ETF (NYSE: IYZ)
Warren Buffett announced an 11-million share stake in Verizon (NYSE: VZ) yesterday, and that has the stock up this morning. The news that the world’s most famous investor is moving into the telecom sector should have investors looking not only at VZ, but its peers.
IYZ has been steadily, slowly moving higher over the last year as it trades within a narrow range. The ETF is currently in the middle of the range, but could move towards the upper end near $31 on last night's news.
Global X FTSE Greece 20 ETF (NYSE: GREK)
The Greek stock market seemed to have moved past the bailout of a few years ago, but recently the sellers have returned. As a result the ETF has been breaking down.
Since hitting a high on March 17, 2014, the ETF is down 19.2 percent and closed yesterday at the lowest level since last October. A big 16 percent drop in the value of the National Bank of Greece (NYSE: NBG) was a major catalyst in the selling of GREK and other stocks based in the country. NBG did get an upgrade this morning, so it could cause some bargain shopping in the ETF.
Market Vector Gold Miners ETF (NYSE: GDX)
The ETF was down 1.6 percent yesterday and is now within a few pennies of breaching an important support level.
For the last two months the ETF has been consolidating and forming a descending triangle pattern that consists of a flat support level and declining highs. The support level on a closing basis is $23.50, and yesterday GDX hit a low of $23.51 before closing at $23.62. Pre-market the ETF is trading at $23.50. If it closes below that price to end the week it would be extremely bearish from a technical perspective.
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