ETF Outlook for Thursday, March 27, 2014
First Trust Dow Jones Internet Index ETF (NYSE:FDN)
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Today the Internet stocks attempt to snap the six-session losing streak that ended with a 2.5 percent loss on Wednesday. In the last three weeks, the ETF is down 10 percent, but it remains above the 2014 low of $57.65.
The key for FDN in the coming days will be to hold above the 2014 low and begin to build a base or a snap-back rally. The last three days the volume has been twice the average volume, which can either indicate the beginning of a major sell-off with the sellers now in control or a short-term capitulation sell-off. The next two days will be important to watch closely.
SPDR Euro Stoxx 50 ETF (NYSE:FEZ)
The European stocks were able to hold up much better than the U.S. yesterday after some positive economic news out of the region. FEZ was able to close with a minimal gain and is currently trading down 1.4 percent from its multi-year high.
The ETF is heavily concentrated in France, Germany, and Spain with the financial stocks accounting for 27 percent of the portfolio. Of the three countries, Spain had the best day yesterday. The action in FEZ the last few months has created a trading range just below a new high. For the ETF to breakout it would need to close above $42.63 with above-average volume.
SPDR Financial ETF (NYSE:XLF)
The large banks should be on the move today after the results of the of the capital returns plans that were submitted by 30 of the nations largest lenders. The Fed approved the plan of 25 of the 30 lenders with Citigroup (NYSE:C) as the biggest name to receive a rejection letter.
After hours yesterday several of the lenders came out and revealed their plans to either buy back stock or increase dividend payments. The initial reaction from investors was negative as the ETF sold off as the news spread across the wires.
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