ETF Outlook for Tuesday, November 19, 2013 (IGV, VDE, FXI, VIS, DIA)
ETF Outlook for Tuesday, November 19, 2013
iShares North American Tech-Software ETF (NYSE: IGV)
The second largest holding of the ETF that makes up 9.1 percent of the portfolio reported earnings after the bell last night. Salesforce.com (NYSE: CRM) reported EPS that were in line with estimates and a slight beat on revenue. The stock initially fell after the report before catching a bid and trading higher by approximately one percent.
By the time the opening bell rings Tuesday, the stock could be higher or lower depending on how investors react as they digest the report. With the stock making up such a large portion of the ETF it should have an affect on where IGV finishes the day. The stock is also a big holding in the First Trust ISE Cloud Computing ETF (NYSE: SKYY), making up 4.2 percent as the number four holding overall.
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Vanguard Energy ETF (NYSE: VDE)
The ETF hit the best level since 2008 yesterday as the frenzy over Warren Buffett disclosing a stake in Exxon Mobil (NYSE: XOM) carried the stock higher yet again. The reason VDE is so closely tied to XOM is because the latter makes up 21 percent of VDE’s portfolio.
XOM traded above its previous all-time high set in 2008 yesterday before it sold off into the close. If XOM fails to break above $96/share and confirm the breakout it could be a short-term top for the stock and therefore a similar fate for VDE.
iShares FTSE/Xinhua China 25 Index ETF (NYSE: FXI)
A rally of 4 percent to start the week sent the ETF to the best level since February on the back on heavy volume. The breakout that occurred is important from a technical perspective and could be the start of a major turnaround in the Chinese stock market.
On the other hand, the buying has been spurred on by news out of the country last week, which focused on major changes in the future. One of the major changes is the one child per family policy that has been in affect for quite some time.
Vanguard Industrials ETF (NYSE: VIS)
The ETF began the week with another positive close and has extended its winning streak to seven sessions. The ETF is at a new all-time high after rallying 10 percent in the last five weeks it is in short-term overbought territory. A pullback appears imminent for the ETF that is composed of big names such as General Electric (NYSE: GE)and Boeing (NYSE: BA).
Both stocks gapped to new highs yesterday on news out of an air show in the Mideast that saw BA garner a large amount of new orders. The longer-term outlook for the ETF looks bullish, however the short-term is questionable.
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SPDR Dow Jones Industrial Average ETF (NYSE: DIA)
The Dow Jones Industrial Average crossed above 16,000 for the first time yesterday before running into a wave of selling before the closing bell. The S&P 500 joined the Dow in a historic move as it traded above 1,800 for the first time ever. DIA tracks the Dow and hit an intraday high of $159.95 before the pullback began.
Looking at the charts it is no surprise the selling occurred after hitting a historic level. The index is overbought in the short-term and a pullback is more than overdue. Support on DIA is at the $156-$157 area and more selling this week would not be a surprise to technical analysts that follow the market.
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