5 ETFs on the Verge of Big Things
Even though stocks have been breaking out in recent months, it's still not too late to partake in the boom with these five potential-filled ETFs.
With stocks continuing to grind higher, latecomers to the party might be feeling as if they missed out on some good moves. They have, but hey, no one is perfect, and the good news is there's a fair number of nonleveraged ETFs that are worth a look right now.
By "worth a look," we mean those funds that are still a considerable distance away from their 52-week highs and that are on the verge of significant technical breakouts. There's more good news: The five ETFs we've selected that meet the aforementioned criteria would make for a diverse portfolio on their own as various sectors and countries are found in our group.
1. Guggenheim China Small Cap ETF (HAO) The Guggenheim China Small Cap ETF has surged almost 50% off its October bottom, and that statistic might be keeping new capital on the sidelines regarding this fund. That's understandable, but remember: Chinese ETFs have been strong this year, emerging markets in general have impressed, and small-cap funds have been stout as well.
HAO has that combination. It has the potential for significant upside if it can crack $24 on strong volume. Asking for the 52-week high of just over $30 in the near term might be a little greedy, but a move to the high $20s in the next couple of months isn't out of the realm of possibility.
2. First Trust ISE-Revere Natural Gas Index Fund (FCG) FCG is useful for a surprising amount of sub-plots in the energy space, not the least of which is increased mergers and acquisitions activity and the move by many companies away from natural gas production to increased oil output. So on those two points alone, FCG has merit.
The ETF has been a solid but not yet jaw-dropping performer in 2012, and that's actually appealing. Should FCG clear $20, an area that proved to be serious resistance three times last year, seeing this ETF go to $22-$23 is plausible.
3. SPDR S&P Bank ETF (KBE) Resurgent bank stocks have been a nice bonus for wary investors in 2012, and for those who just couldn't decide which one to settle on, ETFs have served their purpose. With KBE up almost 13% year-to-date and almost 33% since October, it would be wise to wait for the ETF to clear what is proving to be some stiff resistance around $22.60. KBE has been able to peak through a couple of times recently but can't stick above an uptrend line. That's what needs to happen for a legitimate breakout to be confirmed here.
4. Market Vectors Junior Gold Miners ETF (GDXJ) Now this is one that will run hard and fast should it clear its next major technical hurdle. After struggling to keep pace with bullion for almost all of 2011, mining ETFs have gotten their acts together in 2012. GDXJ recently emerged from a reverse head and shoulders formation and is now dealing with some resistance just pennies above current levels.
That's not the only hurdle. The ETF also needs to reclaim its 200-day line just below $31, and $31 looks like horizontal resistance. In other words, if GDXJ can accomplish all of those feats, it would be an overtly bullish sign.
5. Global X FTSE ASEAN 40 ETF (ASEA) Another ETF that has a solid fundamental resume is ASEA; it has been having a solid but unspectacular 2012 by the standards of emerging markets ETFs. A strong volume move above $16.40 could lead to upside of 10% from there.
Editor's Note: This content was originally published on Benzinga.com by The ETF Professor.
Below, find some more great ETF and market content from Benzinga:
Urban Outfitters Reputation Clean-Up Necessary, Former CEO to the Rescue
By Katey Stapleton
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter