ETF Outlook for Tuesday, April 22, 2014
PowerShares Dynamic Media ETF (NYSE:PBS)
After hours yesterday streaming video company Netflix (NASDAQ:NFLX) reported strong quarterly earnings and announced they would be raising the monthly subscription price.
New customers will be paying an additional dollar or two within a few months and it did not deter investors from buying into the stock as it traded higher by 6.5 percent after the announcement. The stock is the seventh largest holding in PBS, making up 4.2 percent of the portfolio. Look for PBS and NFLX to both be on the move Tuesday.
iShares U.S. Pharmaceutical ETF (NYSE:IHE)
A $45 billion deal could be in the works in the drug sector. News out that Valeant Pharmaceuticals (NYSE:VRX)was going to make a big for Botox maker Allergan (NYSE:AGN)had both stocks trading much higher in after hours on Monday. AGN was up nearly 20 percent on top of a six percent gain Monday and VRX was up 10 percent after gaining three percent during regular trading.
VRX is not a member of IHE, but AGN makes up 5.7 percent and is the sixth largest holding in the ETF. The sector should get a boost from the news today and IHE and all drug ETFs will be benefit.
iShares Transportation Average ETF (NYSE:IYT)
The Dow Jones Industrial Average and S&P 500 remain over one percent below the all-time highs as IYT is a few ticks from breaking out. The ETFs largest holding with a 14.4 percent allocation, Union Pacific Corp (NYSE:UNP) was up one percent yesterday to a new all-time high.
The outperformance of the transportation stocks can be a good signal for the overall market and the other major stock indices may not be far behind. The all-time closing high for IYT is $137.57 and it closed at $137.43 on Monday.
iShares MSCI Ireland Capped ETF (NYSE:EIRL)
One of the top performing single-country ETFs over the last year peaked the last day of February and pulled back six percent until it found support last week. Yesterday the ETF led the international ETFs with a gain of one percent and formed a bullish candlestick pattern on the chart.
Combine that with an RSI buy signal as the indicator moves from oversold territory and it appears the pullback was healthy and a new uptrend may be forming.
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