Market Overview

A Look Ahead: Next Week's ETFs to Watch

Despite a lethargic day on Friday, this was by all accounts a very nice week to be long the market as all three major U.S. indexes jumped more than 3%. Friday's action wasn't surprising after the stunning rally put in by equities and other riskier assets on Thursday, but one negative is that a strong October consumer confidence was ushered aside on Friday.

Of course, this rally has come courtesy of Europe and the belief that things are starting to look better across the Atlantic. Maybe Europe's sovereign debt situation really is improving, but the problem has not been put to bed. Hey, we're not raining on anyone's parade. We're just telling the truth.

Speaking of the truth, here are some of the ETFs you'll want to be tracking and trading in the week ahed.

Market Vectors Brazil Small-Cap ETF (NYSE: BRF): In the span of about 10 weeks, Brazilian stocks have gone from bear market to bull market and should those bullish ways continue, BRF is going to benefit. If BRF can reclaim its 200-day moving average next week or the week after, a move back to $60 before year-end is possible. Europe needs to remain calm and keep bad news down to support emerging markets ETFs, including BRF.

Utilities Select Sector SPDR (NYSE: XLU): With a slew of utilities earnings reports next week, XLU is at a critical juncture. That's assuming the market continues moving higher. We're not betting on significant declines for conservative ETFs like XLU. We're merely saying the more riskier fare is embraced, the more ETFs like XLU will be pushed to the back burner. Support should be firm in the $34 area.

SPDR S&P Oil & Gas Exploration & Production ETF (NYSE: XOP): Capping a nice week for oil futures and oil equities, XOP surged almost 8%, though the bulk of those gains were concentrated to Thursday's trading session. While XOP may be near-term overbought, the chart is strong as long as the ETF remains above the 200-day line. Plenty of earnings reports for XOP constituents remain and those could serve as the catalyst to get the ETF closer to $60 by next Friday.

Market Vectors Coal ETF (NYSE: KOL): Both Alpha Natural Resources (NYSE: ANR) and Walter Energy (NYSE: WLT) deliver third-quarter results next week. We don't know if KOL can mirror its 12% jump this week next week, but the chart is strong and investors seem to be believing coal stocks were punished too harshly in August and September.

Vanguard MSCI Emerging Markets ETF (NYSE: VWO): Our sentiments regarding Brazil apply here as well. Combine that with compelling valuations in Chinese stocks and that VWO still has more than 15% to run before it gets back to its 52-week high and there might be value with this ETF as well.

Posted-In: Earnings Long Ideas News Sector ETFs Broad U.S. Equity ETFs Short Ideas Specialty ETFs New ETFs

 

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