I'll also look at the ETF's chart, taking note of certain reference points, including support and resistance levels and simple moving averages.
Here are two pair trades worth considering.
Both PRN, in the Industrials sector, and KOL, in the Energy sector, are within the top 10% of the rankings, and have strong fundamental and technical elements in their favor. These are the Bullish recommendations.
On the flip side, RTH, in the Retail sector, and KCE, in the Financials sector, reside in the bottom 10% of the same rankings, and serve as the Bearish choices for this model.
These four ETFs can be configured into pairs of either PRN/RTH and PRN/KCE or KOL/RTH and KOL/KCE.
Pair away at your leisure. In the meantime, here's the lowdown on each of these ETFs.
PRN (PowerShares Dynamic Industrials Sector Portfolio Fund) is based on the Dynamic Industrials Sector Intellidex Index. The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Index thoroughly evaluates companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investments and risk factors. The Fund seeks investment results that correspond generally to the price and yield (before the fund's fees and expenses) of the target index.
KOL (Market Vectors Coal ETF) is an exchange-traded fund launched and managed by Van Eck Associates Corporation. The fund invests in stocks of companies across the globe and all market capitalizations that operate in the Coal and Mining Industry. It seeks to invest its corpus in stocks of companies that form the Stowe Coal Index in proportion to their weightings in the Index. KOL seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of that Index.
RTH (Retail HOLDRS Trust) is an equity exchange-traded fund launched and managed by Merrill Lynch. The investment offers diversification in the retailing industry through a single, exchange-listed instrument. The trust holds securities issued by specified companies that, when initially selected, were in the retailing industry. There are currently 20 companies included in the Retail HOLDRS Trust.
KCE (SPDR KBW Capital Markets ETF) is an exchange-traded fund launched by State Street Global Advisors and managed by SSgA Funds Management, Inc. The fund invests in stocks of companies operating in the Financials Sector. The fund replicates the KBW Capital Markets Index (Ticker: KSX) by investing in the companies of that Index in approximately the same proportion and, before expenses, seeks to closely match the returns and characteristics of that Index.
Don't be too surprised if what occurs this week in the markets serves as a tone-setter for the 2nd quarter. It really is a fulcrum point right now, so keep eyes wide.
Full disclosure: The author does not personally hold any of the ETFs mentioned in this week's "What the Periscope Sees."
Disclaimer: This newsletter is published solely for informational purposes and is not to be construed as advice or a recommendation to specific individuals. Individuals should take into account their personal financial circumstances in acting on any rankings or stock selections provided by Sabrient. Sabrient makes no representations that the techniques used in its rankings or selections will result in or guarantee profits in trading.