ETF Outlook for Tuesday, March 18, 2014 (CARZ, XHB, IGV, GLD)
ETF Outlook for Tuesday March 18, 2014
First Trust NASDAQ Global Auto ETF (NASDAQ: CARZ)
The news of a massive General Motors (NYSE: GM) recall has sent the stock down over 10 percent in the last week, as more disturbing news continues to leak into the media. The stock is the seventh largest holding in CARZ and makes up five percent of the ETF's portfolio.
The ETF has also pulled back with GM and hit a one-month low on Friday before bouncing Monday with a gain of 1.7 percent. If GM can get past the current negative headlines it should be able to regain its previous share price, which in turn will boost CARZ. The ETF needs a close above $41 for a major breakout from a six-month low consolidation pattern.
SPDR S&P 500 Homebuilders ETF (NYSE: XHB)
Housing starts for the month of February were released Tuesday morning, coming in at 907K, down from 909K in January and slightly below the estimate of 910K. Permits came in better than expected, at 1.02M versus 945K last month and expectations of 960K. Shares of XHB and the iShares U.S. Home Construction ETF (NYSE: ITB) should be catching some bids higher Tuesday after the mainly positive news. Both ETF have pulled back in the last two weeks and are sitting at oversold levels based on their RSI readings. A bounce Tuesday is likely.
SPDR Gold ETF (NYSE: GLD)
The precious metal, a safe haven for investors during the Ukraine situation, finally hit a ceiling Monday and fell 1.1 percent. The ETF is on the defensive again Tuesday moring and is down another 0.7 percent. After closing Monday at $131.64, the ETF could see a pullback to price support at the $127 area in the next week or two as investors take profit and realize the Ukraine situation is not causing the stock market to crumble.
iShares North American Tech-Software ETF (NYSE: IGV)
The largest holding in IGV, Oracle (NASDAQ: ORCL), is rallying early Tuesday ahead of its quarterly earnings announcement after the closing bell. The stock is down three percent from a 14-year high and sitting on support. If the numbers come in solid, it will more than likely lead to a buying spree for the stock that could send it back to a new high.
IGV has a similar chart and is also sitting on support at the $84 area and is trading three percent from its all-time high. The ETF is a basket of 60 software stocks with Salesforece.com (NYSE: CRM) and Adobe Systems (NASDAQ: ADBE) rounding out the top three holdings. The ETF has $1.28 billion in assets, but only trades approximately 60,000 shares per day. It can be said the ETF is flying under the radar.
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