ETF Outlook For The Week Of January 13, 2014 (CARZ, XLF, IGN, RTH)
ETF Outlook for the week of January 13, 2014
First Trust NASDAQ Global Auto Index ETF (NYSE: CARZ)
The International Auto Show begins on Monday in Detroit and all major auto manufacturers will be there showing off their new concepts. The auto stocks have been trading within a range for the last four months after hitting a high in October.
The buzz around the auto show could spark some interest in the sector and help propel it out of the trading range and to a new high. A close above $40.25 would be the signal needed for the breakout to be confirmed. The largest holdings in CARZ are Daimler, Volkswagen and Toyota Motor Company (NYSE: TM).
SPDR Financial ETF (NYSE: XLF)
The fourth quarter earnings season gets into full swing this week with a barrage of large financial stocks reporting. On Tuesday JPMorgan Chase (NYSE: JPM)and Wells Fargo (NYSE: WFC) are scheduled with Bank of America (NYSE: BAC) on Wednesday. Look for the big name financials to move the sector throughout the week as investors react to the numbers.
XLF is a basket of the largest financial stocks in the U.S. with WFC and JPM the two largest holdings, making up 16 percent of the portfolio. BAC is the number four holding at 6.7 percent. The ETF is currently trading a few pennies from a multi-year high and the next move will be determined by the earnings announcements this week.
iShares S&P North American Technology-Multimedia Networking ETF (NYSE: IGN)
A bullish article about Cisco Systems (NASDAQ: CSCO) this weekend in Barron’s should give the stock a boost on Monday morning. The publication suggests the networking giant is 20 percent undervalued. The stock is the second largest holding in IGN with an allocation of 8.4 percent. The long-term chart of CSCO is not overly attractive and the stock has been in a downtrend since August.
On the other hand IGN has been strong and is pulling back from a multi-year high. If the second largest holding can get going again it would be a big catalyst for IGN.
Market Vectors Retail ETF (NYSE: RTH)
The retail sector got a write-up in Barron’s this weekend and a few names were mentioned as bargain buys. With holiday sales up 3.4 percent this past year and not exciting many investors the retail sector has been stagnant the last two months.
RTH is trading near the high, but needs to get some good volume for a confirmed breakout. As investors begin bargain hunting for stocks in the sector it could propel RTH above the $61 resistance level. The largest holdings in RTH are Amazon.com (NASDAQ: AMZN), Wal-Mart (NYSE: WMT), and Home Depot (NYSE: HD).
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