ETF Outlook for the Week of February 10, 2014
iShares NASDAQ Biotech Index ETF (NYSE:IBB)
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One of the most impressive sectors in the entire market right now is the biotech stocks. The group hit a new all-time high earlier this year and not even the recent market-wide pullback could send IBB back below its trend line or the 50-day moving average.
The ETF pulled back seven percent before rallying on Friday with a big gain of 4 percent for the day. It appears the uptrend is set to continue and if the trend continues a new high is in store for the ETF and its peers.
iPath S&P 500 VIX Mid-Term Futures ETN (NYSE:VXZ)
The CBOE Volatility Index (VIX) hit a new one-year closing high on Monday before falling by 29 percent the remainder of the week. VXZ continued moving higher into Wednesday before plummeting seven percent the last two days of the week.
As volatility slows and panic starts to disappear VXZ will move lower. The bears look at VXZ as a hedge against a market sell-off, which it is. However, in the last year the ETN is down 30 percent and it would have been a huge drag on a portfolio. The ETN is best saved for traders will to take on high risk.
Global X Greece 20 ETF (NYSE:GREK)
The best performing country ETF last week was the country that was at the crux of the European financial crisis. Greek stocks continue to outperform after a solid 2013. In late January the ETF hit an important support level at $21 and rallied to form a bullish triple bottom pattern.
As long as the ETF holds above support the trend is extremely bullish. On the upside, a breakout above $25 would be a significant move for GREK and would solidify the current bullish trend.
Market Vectors Junior Gold Miners ETF (NYSE:GDXJ)
The gold mining stocks continue their strong start to 2014 with the smaller cap names in the sector leading the way. GDXJ is up a whopping 23.5 percent year-to-date and closed Friday at the best level in three months. The breakout on Friday was significant for the sector and the ETF.
The Market Vectors Gold Miners ETF (NYSE:GDX), the bigger names in the sector, is up against resistance and has yet to breakout. It must close above $24.01. This week will be critical for the miners; a breakout would confirm a potential bottom for the sector. While failure to hit and hold new highs would signal the continuation of the longer-term trend, which is down.
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