4 top ETF trades for the week ahead
These exchange-traded funds are likely to be in play as traders look to profit from the turmoil in Europe.
By Billy Fisher
This week should see a great deal of volume as traders position themselves to profit from economic unrest in Europe. Other economic events of interest have the potential to make waves in the coming days as well.
Here are the four top exchange-traded fund (ETF) trades from Stock Traders Daily for the week ahead.
Gold has faced some tough sledding in the first quarter. Following the drop of the 50-day moving average of the SPDR Gold Trust ETF (GLD) below its 200-day moving average on Feb. 13, this ETF has retreated from $159.05 to $155.55. Although its technical indicators are not all that favorable, the fortunes of the fund may be about to change.
The fact that levies on bank accounts have even surfaced as a possibility in Cyprus will be more than enough to move the needle on gold as investors consider safe-haven plays. Expansionary monetary policies across the globe are also likely to allow gold to push higher. GLD has the wind at its back right now.
Unfortunately the prospects for a turnaround for the Market Vectors Steel ETF (SLX) are not as promising. The 50-day moving average on this ETF is sliding downwards towards its 200-day moving average after a strong start to the year. Tempered demand from China and a slow-growth macro backdrop in the U.S. will continue to weigh on SLX. Taken together these factors make the ETF a compelling short play in the near term.
Real estate revival
So far it has been a big year for the SPDR S&P Homebuilders ETF (XHB). The fund has rallied 12.8% since the start of the year and is up 41.4% over the course of the past 52 weeks. XHB will have the chance to continue its brilliant run this week when the Department of Commerce releases its report on new home sales.
The president of Lennar has said that his company has already seen a strong start to the spring selling season for new homes. KB Home also recently noted a huge jump in Q1 net orders on the West Coast. These trends make XHB an attractive bet ahead of this week’s release.
One other ETF for traders to keep an eye on this week is the Market Vectors Agribusiness ETF (MOO). Mosaic, a top holding, is slated to announce its fiscal Q3 results on Thursday. Analysts are calling for a 37.5 % spike in EPS on a 16.0% jump in revenue when compared to the prior year quarter. MOO's portfolio of holdings gives traders some protection in the event of an earnings miss by Mosaic.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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