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6 Must-Know ETFs for Cyber Monday


If the broader market rallies today and Cyber Monday surpasses expectations, all of the ETFs mentioned here could easily bounce.

Well, it's fair to say Black Friday was a success. US consumers, the folks who account for about two-thirds of this nation's GDP, spent an estimated $52.4 billion during the four-day weekend, up from $45 billion last year, according to the National Retail Federation.

That's good news for the brick-and-mortar retailers. Now it's time for the bricks-and-clicks crowd to step up to the plate with the arrival of Cyber Monday. Cyber Monday, the Black Friday equivalent for e-commerce juggernauts like Amazon (AMZN) and eBay (EBAY), is here, and it started a day earlier than it did last year.

In 2010, Cyber Monday sales reached $1 billion, and some analysts are predicting that number could grow to $1.2 billion this year. How important is Cyber Monday for the e-commerce crowd? Consider this: In 2006 it was only the 12th-biggest online spending day of the year, but has grown every year since and became the top day for online spending last year, according to the Los Angeles Times.

With that, let's have a look at some of the must-know ETFs for Cyber Monday.

Internet HOLDRs (HHH): The Internet HOLDRs is one of the HOLDRs that's not in the process of becoming a Market Vectors ETF, and that's too bad. If the ETF was converting, we could expect the fund would not only have a new name, but it would be a bit more balanced. However, until the Internet HOLDRs does change its composition, it's the epitome of a Cyber Monday play because Amazon and eBay account for almost 68% of its weight.

Be warned that Internet HOLDRs is thinly traded and that just a few weeks ago it was flirting with $84, but closed below $69 on Friday. Maybe Cyber Monday will bring a cyber bounce for it.

PowerShares NASDAQ Internet ETF (PNQI): Another thinly traded play, the PowerShares NASDAQ Internet ETF is also an unheralded Cyber Monday play. Stocks with the consumer discretionary label account for over 23% of the ETF's weight. Among that fray are Amazon, eBay, Google (GOOG), Blue Nile (NILE), and Overstock (OSTK). PNQI has been in a tailspin lately, and if Cyber Monday doesn't help the fund, then it could fall to support at $28.

First Trust Dow Jones Internet Index Fund (FDN): Google, Amazon, eBay, and Blue Nile account for roughly 25% of the First Trust Dow Jones Internet Index Fund's weight. That alone is good enough to make this a Cyber Monday ETF to watch. Or maybe you're being cheap and giving out Netflix (NFLX) subscriptions as a gifts this holiday season. That's fine as Netflix is also part of FDN's lineup. Be careful with FDN below $28.

iShares Dow Jones Transportation Average ETF (IYT): As I noted last Cyber Monday, someone, namely FedEx (FDX) and UPS (UPS), has to ship all those orders that Amazon and eBay receive, and that makes IYT a Cyber Monday play despite a distinct lack of high-tech names.

Retail HOLDRs (RTH): The Retail HOLDRs is one of the HOLDRs funds making a switch to the Market Vectors family, but until that happens, it's a good Cyber Monday play. Not only does Amazon account for over 12% of RTH's weight, but Wal-Mart (WMT) accounts for 19.3%, Target (TGT) gets an allocation of 7.7%, and Best Buy (BBY) represents 2.2% of RTH's weight. Of course, there are other holdings that make this a legitimate Cyber Monday play.

SPDR Morgan Stanley Technology ETF (MTK): The first member of the list that includes decent exposure to Apple (AAPL), the SPDR Morgan Stanley Technology ETF also features Amazon, eBay, Google, and a couple of other tech names with heavy discretionary exposure. If MTK falls to $54 and support holds there, the ETF would be a buy as a short-term trade.

Bull case: If the broader market rallies today and Cyber Monday surpasses expectations, all of the ETFs mentioned here could easily bounce. PowerShares NASDAQ Internet ETF, First Trust Dow Jones Internet Index Fund, and Retail HOLDRs would be the members of this list most levered to Cyber Monday success.

Bear case: Maybe shoppers have had enough or maybe they want to go the traditional brick-and-mortar stores. Or perhaps Europe will be a problem again today. Either scenario equals bad news for the ETFs on this list.

Editor's Note: This content was originally published on by The ETF Professor.

Below, find some more great ETF and market content from Benzinga:

By Daniel James Hayden IV

Twitter: @Benzinga

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No positions in stocks mentioned.

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