Market Overview

Mind The Gap: 5 ETFs With Technical Gaps to Fill

For those that are fans of technical analysis, prevailing wisdom holds that most gaps, up or down, get filled at some point. For those are long the market, that's good news because plenty of ETFs are currently sporting nasty down gaps on their charts that need to be filled.

Some of the gaps are especially nasty, but if the market can legitimize its recent bounce, then the following list of potential gap-fillers could prove very profitable indeed.

iShares Silver Trust (NYSE: SLV): Thank you CME Group! Thanks to a rising dollar and selling pressure induced by margin hikes, the iShares Silver Trust, the largest physically-backed silver ETF, has not one, but two gaps. If SLV can break resistance just below $32, the ETF can probably fill the gap from there to $35. The $35-$38 gap could be trickier, but when traders embrace silver, they do so in a big way, so SLV's chances of filling both gaps are at least decent.

Global X Silver Miners ETF (NYSE: SIL): Do you see a theme developing here? Like SLV, the Global X Silver Miners ETF has some gap-filling to do, but of a more modest nature. If SIL can make it back to $24, which it will only do if SLV is going higher, than the miners ETF will fill the gap back to $26.

Market Vectors Gold Miners ETF (NYSE: GDX): The theme gets extended here as the Market Vectors Gold Miners ETF has a wicked gap to fill, at least in terms of how much work on a dollar basis the ETF needs to do to fill its gap. The gap down occurred in September from just over $64 to $61. That doesn't sound bad, but the gap created more selling pressure, but with GDX trading below $55, filling this gap won't be a piece of cake. On the other hand, GDX is volatile for an unleveraged ETF and its swings are big enough that this gap could be filled before the end of the year.

Global X FTSE Colombia 20 ETF (NYSE: GXG): Gaps don't always have to be big in dollar terms to be hard to fill. GXG might see that theory prove true in its attempts to fill small gap back to $19.50 from $19. We actually like GXG's chances because Colombia's fundamentals are still compared to the rest of Latin America. We're not saying GXG is going to add 20% from here, but filling the gap is quite possible in the near-term.

Market Vectors Russia ETF (NYSE: RSX): Like SLV, the Market Vectors Russia ETF has two gaps to fill. The first is small, to around $28 from the $27 area, but that will require resistance breaking at $26. The next gap is from $32.50 to $34. That will require passing two moving averages and large percentage move from current levels. RSX's first gap is attainable, but the second one will take far longer to fill.

Posted-In: Long Ideas News Sector ETFs Short Ideas Specialty ETFs New ETFs Emerging Market ETFs Technicals

 

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