ETF Outlook for Thursday, February 20, 2014 (XLF, GEX, USO, NGE, TSLA)
ETF Outlook for Thursday, February 20, 2014
SPDR Financial ETF (NYSE: XLF)
The Fed minutes released midday yesterday sent a jolt through the market that interest rates may rise sooner rather than later. The overall market sold off in the last two hours of trading, led lower by the financials. XLF closed the session down 1.3 percent after only posting one losing day in the last ten.
The volume yesterday was nearly twice that of the average daily volume during the two-week rally. The chart of XLF is worrisome and needs to be watched closely in the coming days. If the fears of higher interest rates in the near future come to fruition it could take a toll on the financial stocks.
Market Vectors Global Alternative Energy ETF (NYSE: GEX)
The ETF’s top holding, Tesla Motors (NASDAQ: TSLA), reported earnings better than expected last night and the stock immediately jumped 10 percent. Even though revenue missed estimates, it still came in higher by 100 percent versus last quarter. The stock makes up 11 percent of GEX, followed by 9.5 percent in Eaton Corp (NYSE: ETN).
The ETF is trading just below a multi-year high at $60. If the stock can hold onto the gains throughout the day it could help push GEX to the best level since 2011. Another ETF to watch is the First Trust Clean Energy Green Energy ETF (NYSE: QCLN), which also calls TSLA its top holding with an 11 percent allocation.
United State Oil ETF (NYSE: USO)
Crude oil closed yesterday up 0.8 percent at $102.93, the best level in four months. USO followed suit with a gain of 0.7 percent and is also sitting at a four-month high. The breakout above $36 earlier this week for USO was significant and as long as the ETF can hold above the level that is now support the chart will remain bullish. If the current trend continues it could send USO to test the yearly high of $39.54.
Global X Nigeria ETF (NYSE: NGE)
The African country ETF was able to shrug off a market-wide sell-off yesterday and closed the session higher by 1.2 percent. This comes after a rough few weeks that has sent the ETF lower by 15 percent from a seven-month high.
The ETF has been able to hold above important support in the last few days at $13.61, the lowest level ever for the ETF that began trading in April 2013. If the ETF can continue to hold support it will be a solid technical signal and could be an opportunity for long-term investors interested in the small single-country ETF.
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