investors intelligence
Generating first rate investment advice since 1947
Sample Research


Services:

ETF Global Opportunities
Weekly analysis on US stocks, sectors, commodities and global indices.
2 July 2014
     

Market Overview

Since last week our short-term-composite has broken lower to 62% but then sharply returned to revisit the 74% level on the P&F chart. Therefore resistance is being encountered again but the indicator still holds the potential to visit the end of 2013 peak at 82%.

Looking through individual equity ETFs today it is apparent that they are becoming increasingly overbought, so we are not entering new longs here. Rather we suggest watching to buy on the next bout of weakness.

Today we trail one stop higher, close out a long and enter a short in an underperforming commodity ETF. 
 

 


This Week's Trades

  • Agriculture Fund (DBA) - shorting, stoploss at $28.50
  • Sugar (SGG) - closing long
  • US High Yield (HYG) - stoploss raised to $94.50

Note - Trades will be executed on today's close.


Other ETF Highlights

 

US Equity Indices

  • NASDAQ 100 (QQQ) - buy on weakness

US Sector Indices

  • Biotechnology (IBB) - buy on weakness
  • Health Care (XLV) - add on weakness
  • Pharmaceuticals Index Fund (IHE) - buy on weakness

Other Developed Indices

  • Japan SmallCap Dividend Fund (DFJ) - relative buy

Emerging Indices

  • Emerging Asia Pacific (GMF) - buy on weakness
  • South Africa (EZA) - buy breakout

Currencies

  • Australian Dollar Trust (FXA) - buy
  • British Pound Sterling Trust (FXB) - buy reiterated

Commodities

  • see trades

Bonds

  • see trades


Analysis

 

US Equity Indices

 

The P&F price chart for the NASDAQ 100 (QQQ) advanced to a new decade high yesterday. However, the rally since April has been persistent, so short-term conditions are overbought. Therefore entry is suggested on weakness, not here.

That said, outperformance is expected going forward, as the P&F relative chart reversed up on Tuesday, to potentially reassert the ten year uptrend.

 

 

 

US Sector Indices

 

The Biotechnology (IBB) fund advanced a box yesterday, a significant move as it broke falling trendline resistance off the February peak. The long-term uptrend is likely reasserting.

A visit to the all-time high from January of $275.40 is possible over the next few weeks.

 

 

The Health Care (XLV) fund advanced to a new all-time high yesterday. Momentum, the 14-day RSI, is close to overbought, so adding should be avoided until that unwinds.

We trail the stop higher to $60.25 for our long position.

 

 

 

The Pharmaceuticals Index Fund (IHE) rallied 1.5% yesterday to register a new all-time price high, with some positive follow-through today.

Momentum is entering overbought, so a pullback may soon develop. We would see that as an entry opportunity. An outperformer since April.

 

 

 

Other Developed Indices

 

The Japan SmallCap Dividend Fund (DFJ) advanced a box on its price chart on Tuesday, equaling the 2007 peak. The relative chart also strengthened on the session, reversing up from long-term lows, signifying that the fund was entering a period of outperformance.  

 

 

Emerging Indices

 

The Emerging Asia Pacific (GMF) ETF broke to a new two year high yesterday. A steady uptrend has been underway since February but momentum is nearing overbought, so entry is best sought on the next pull-back.

A potential relative base has been taking shape since the start of the year, suggesting possible future outperformance.

 

 

 

The South Africa (EZA) fund has been consolidating on its 50-day exponential moving average since May. That action has enabled momentum to settle across neutral, providing the opportunity for a reassertion of the five month uptrend.

The P&F price chart shows major three year resistance across $71 and breaking that will open up the door for a move towards $77.58, the all-time high from 2011.

 

 

 

Currencies

 

The Australian Dollar Trust (FXA) filled a box to the upside yesterday, its first since April.

The fund continues its attempt to resume its long-term uptrend. Climbing above $95, resistance, would go a long way to achieving that.

 

 

The British Pound Sterling Trust (FXB) is trading around 2009 levels. Clearing $170 will activate a large multi-year base with a target then towards $200. We reiterate our buy advice.

 

 

 

Commodities

 

The Sugar (SGG) fund is breaking down from its 200-day exponential moving average, likely reasserting the primary downtrend. The relative chart is at new all-time lows.

Conditions are not oversold, therefore further weakness expected. We shall close out our long position in the SGG. 

 

 

 

The Agriculture Fund (DBA) looks to have formed a top over the past four month months. Trading is starting to breakdown and head towards the lows from January, just above $24. Momentum is not oversold.

The P&F relative chart reversed down yesterday to reassert the downtrend off the 2009 high.

We shall open a short in DBA on the close today. The stoploss will be at $28.50.

 

 

 

Bonds

 

The US High Yield (HYG) fund is pulling back towards support from its 50-day exponential moving average, with the uptrend still standing. Momentum is well positioned to allow an imminent reassertion upwards.

We raise the stop-loss on our long position to $94.50, in-the-money.

 

 

MODEL PORTFOLIO
ETF Trading (Long/Short) Longs
Date Stock Code Type Open Price Current Price % P&L Stop
29 Jan 2014 iShares S&P National Municipal Bond Fund MUB Long 106.11 108.38 +2.14% 107.25
19 Feb 2014 iPath Sugar ETN SGG Long 55.84 54.1 -3.12% 51
19 Feb 2014 US Investment Grade Crp LQD Long 116.33 118.47 +1.84% 117.75
26 Mar 2014 US High Yield HYG Long 94.23 94.81 +0.62% 94.50
9 Apr 2014 CurrencyShares British Pound Sterling Trust FXB Long 165.31 168.75 +2.08% 162
16 Apr 2014 SPDR Sector Trst Health Care XLV Long 56.9 61.6 +8.26% 60.25
30 Apr 2014 DJ US Pharmaceuticals Index Fund IHE Long 129.28 137.2 +6.13% 123
30 Apr 2014 SPDR Sector Trst Technology XLK Long 36.45 38.74 +6.28% 37.75
21 May 2014 United States Natural Gas Fund UNG Long 24.78 24.47 -1.25% 23.25
18 Jun 2014 DJ US Regional Banks Index Fund IAT Long 34.73 34.88 +0.43% 33.75
18 Jun 2014 iPath MSCI India Index ETN INP Long 68.9431 69.57 +0.91% 64.50
25 Jun 2014 SPDR Sector Trst Utilities XLU Long 43.61 43.82 +0.48% 41.50
25 Jun 2014 iShares France Index EWQ Long 29.26 29.31 +0.17% 28.50
25 Jun 2014 Gold GLD Long 126.99 127.7 +0.56% 121.55
25 Jun 2014 Emerging Markets Bond EMB Long 115.58 114.75 -0.72% 113.50
ETF Trading (Long/Short) Shorts
Date Stock Code Type Open Price Current Price % P&L Stop
21 May 2014 iShares Brazil Index EWZ Short 48.03 47.88 +0.31% 51
Model Portfolio Rules
Allocation – The maximum number of trades is limited to 20 (including longs and shorts).
 
Opening of positions – Positions are opened at the immediate close following the report, using the closing price.  
 

Closure of positions – The Analyst may close a position to take profits or exit early to prevent a loss if the outlook has changed. Positions will only be closed if there has been prior mention in the newsletter. The closing price will be at the next close following the report.

Stops – Stop levels are given for each model portfolio position.

 
Note - When positions are stopped/closed out they will not appear as closures immediately but we plan to update the portfolio table with in 24 hours.
Recommend a friend! Tell your friends to mention your name when subscribing to Investors Intelligence, and get a months free access to a service of your choice! For more information, email support@investorsintelligence.com

Also available online at www.investorsintelligence.com. Unauthorized forwarding, copying or reproduction of this report will be treated as a breach of copyright. To subscribe, visit the website or contact Investors Intelligence on +44 (0)20 7352 4001 or email support@investorsintelligence.com.

This report has been produced and compiled by Investors Intelligence, a division of Stockcube Research Limited which is authorised and regulated by the Financial Conduct Authority. It is distributed by Stockcube and is provided for information purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to buy. While all reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time Stockcube and any of its officers or employees may, to the extent permitted by law, have a position or otherwise be interested in any transactions, in any investments (including derivatives) directly or indirectly the subject of this report. Also Stockcube may from time to time perform other services (including acting as adviser or manager) for any company mentioned in this report. The value of securities can go down as well as up, and you may not get back the full amount you originally invested. Derivatives in particular are high risk, high reward investment instruments and an investor may lose some or all of his/her original investment. If you make an investment in securities that are denominated in a currency other than that of GB Pounds you are warned that changes in rates of foreign exchange may have an adverse effect on the value, price or income of the investment. The investments referred to herein may not be suitable investments for all persons accessing these pages. You should carefully consider whether all or any of these are suitable investments for you and if in any doubt consult an independent adviser. This report is prepared solely for the information of clients of Stockcube who are expected to make their own investment decisions without reliance on this report. Neither Stockcube nor any officer of Stockcube accepts any liability whatsoever for any direct and consequential loss arising from use of this report or its contents. This report may not be reproduced, distributed or published by any recipient for any purpose without the prior express consent of Stockcube.

Copyright 2014 by Stockcube Research Ltd.





Subscribe here:

  • Weekly update
  • Model Portfoilios
  • Online charts