Thematic Music ETF (MUSQ) Prepares To Strike A Chord As Indicators Point To Upbeat Momentum

Zinger Key Points
  • MUSQ is a thematic ETF provides concentrated exposure to the complete music ecosystem
  • The ETF is trading in an uptrend and forming a bullish inside bar pattern on the daily chart.

MUSQ Global Music Industry ETF MUSQ was trading flat on Thursday, forming an inside bar pattern near the top of the green Marubozu candlestick, which was printed on Wednesday.

The thematic ETF provides concentrated exposure to the complete music ecosystem, covering streaming, content and distribution, live music events and ticketing, satellite and broadcast radio, equipment and technology, and artificial intelligence. The fund holds multiple stocks that encompass the variety of companies and technologies the music industry is dependent upon.

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Recently, many of the pure-play music stocks within the fund have been climbing the charts, indicating investors have become increasingly bullish on the industry. Sphere Entertainment Co SPHR surged 91% between Dec. 5 and March 8 before entering a consolidation period and is the sixth largest holding within the fund, weighted at 3.13%.

Similarly, Spotify Technologies S.A. SPOT has skyrocketed 102% since Aug. 18, Live Nation Entertainment, Inc LYV has risen 40% since Oct. 27 and Tencent Music Entertainment Group TME has soared 100% since the low of $5.70 on Aug. 15.

For investors, particularly those who believe in the power of diversification, MUSQ’s top three holdings include companies that not only play a big part in the music sector but have a toehold in a range of industries., Inc AMZN is the largest holding within the ETF, weighted at 7.92%, Alphabet, Inc GOOG GOOGL is weighed at 7.07% and Apple, Inc AAPL, MUSQ’s third largest holding is weighted at 6.46%.

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The MUSQ Chart: MUSQ has been trading in a tight horizontal trading pattern between about $24.10 and $25.36 since Dec. 23. Since March 5, bullish momentum has been increasing, which is indicated by the ETF’s relative strength index (RSI), which has been making a series of higher highs and higher lows.

  • On Thursday, MUSQ was working to print an inside bar pattern on the daily chart. The pattern leans bullish in this case because the ETF formed a bullish Marubozu candlestick on Wednesday and because Thursday’s inside bar was being formed near the top of Wednesday’s range.
  • MUSQ is also trading in an uptrend, making a series of higher highs and higher lows in line with the fund’s RSI. The most recent higher high was formed on Wednesday at $25.17 and the most recent lower low was printed at the $24.76 mark on Tuesday.
  • Bullish traders want to see big bullish volume come in and break MUSQ up from Wednesday’s mother bar and then for the ETF to continue upward, breaking out above the $25.40 mark. Bearish traders want to see big bearish volume come in and drop the ETF under Tuesday’s low-of-day, which would negate the uptrend and possibly accelerate downside pressure.
  • MUSQ has resistance above at $25.36 and at $25.76 and support below at $24.78 and at $24.34.

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