ETF Outlook For The Week Of June 2, 2014 (PXI, XLI, FCG, UAE, QAT)
ETF Outlook For The Week of June 2, 2014
PowerShares DWA Energy Momentum ETF (NYSE: PXI)
The ETF uses a strategy that identifies energy stocks showing relative strength (momentum). The ETF was up 3.2 percent last week and closed just below the all-time high achieved in April.
The largest holding, Cheniere Energy (NYSE: LNG), was up 17 percent last week as the news regarding alterations to the approval process for new LNG terminals was viewed positively.
Along with LNG, the other names in the ETF are not the big companies that most energy ETFs focus their attention on. If the momentum in LNG and its peers continues this week, the ETF could hit a new all-time high.
SPDR Industrial ETF (NYSE: XLI)
A slew of important economic numbers is slated to be released Monday, with the ISM Manufacturing reading coming out in the morning. The expectation is for the number to rise to 55.5 in May from 54.9 in April. If the ISM is able to come in above expectations, traders should expect the market to rally with the industrial stocks benefiting from the number.
XLI closed out last week four cents below an all-time closing high and any good news will help boost the ETF into unchartered territory.
First Trust Natural Gas Index ETF (NYSE: FCG)
As the price of natural gas has been choppy the last few months, the value of the related stocks have been increasing. The basket of natural gas stocks is up 16 percent in 2014 and trading must below a multi-year high.
As the U.S. continues to expand its exploration and production of natural gas and oil via fracking, it will continue to boost the bottom line of most stocks in the ETF. The current trend is not going away anytime soon.
FCG may be a solid long-term play for traders.
iShares MSCI Qatar Capped ETF (NASDAQ: QAT)
The ETF surged last week after an announcement that the Gulf Cooperation Council member states boosted foreign ownership limits for Doha-listed stocks. The newly introduced ETF closed out last week with a gain of 8.3 percent.
Another ETF from the same region that was introduced in May is the iShares MSCI UAE Capped ETF (NASDAQ: UAE). The ETF was up six percent last week after it was announced the country was being raised to emerging market status by MSCI. Both ETFs will likely remain in the spotlight this week.
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