Over the past five sessions, First Trust Health Care AlphaDEX ETF (FXH) has rallied into resistance near its previous swing high of $31.45. Over the past two sessions, FXH has show signs of pulling back from this key mark. FXH offers a buying opportunity under two scenarios. The first would be a pullback buy entry into support of the 20-day EMA and the uptrend line. An alternative entry could develop if FXH consolidates just below resistance over the next 5 to 10 days. Under either circumstance, we would only enter a long position in this ETF if it provide an appropriate “setup”. Typically we will look to enter above a reversal candle, much like the one formed on June 18th. Given the relative strength exhibited by this ETF (It’s near a 52-week high), we will continue to monitor it closely for a possible buy entry.
On June the 28th, the United States Natural Gas Fund (UNG) formed a bullish reversal candle, as it undercut its 10-day moving average before rallying to close near session highs. For the past two days, UNG has been consolidating along its 10-day MA, as it has attempted to get back above resistance near $19.50. A volume fueled move above the three day high of $19.47 could provide a buying opportunity in UNG. We are placing UNG on the watchlist. Trade details are posted for our subscribers in the watchlist section of the newsletter.
During the recent pullback in the market, the Market Vectors Retail ETF (RTH) showed relative strength, as it held support just below its 20-day and 50-day moving averages, while the broad market undercut the 200-day MA. RTH could provide a buying opportunity either on a pullback toward the gap formed on Friday, or if it consolidates for several days to several weeks near the April 27th and June 19th swing highs ($42.71 and $42.50).
A quick review of the S&P 500 and the Nasdaq should provide a compelling visual, as to the strength of yesterday’s reversal. The S&P 500 quickly lost support of its 20-day EMA yesterday, and appeared ready to test its four day low. However, after setting the intraday low around 2:30 pm, the S&P rallied in the last hour of trading to close near the day’s high. Above the two day high of 1334, the S&P 500 should see resistance at 1340 and 1364.
Over the past three sessions, the ProShares UltraShort Basic Materials ETF (SMN) has pulled back to, and held support of its 200-day moving average. This inverse ETF could provide a buying opportunity if it forms a reversal candle (see blue candlestick) on an undercut of the 200-day and/or 20-day moving averages. A move above the high of the reversal candle would then provide a perfect buy entry trigger. We will be monitoring SMN closely for a potential buy entry.
In Tuesday’s newsletter we stated, “If (the Direxion Daily Gold Miners 3x Bear ETF DUST) can form either a reversal candle or an inside candle, then (we could be provided with) a buying opportunity” in DUST. Yesterday, DUST traded within its three day range and closed in the middle of its intraday range. This price action was accompanied by light volume, which is typical for an ETF or stock during consolidation prior to a significant move. A volume fueled move above the three day high of $50.25 could provide a buy entry trigger for this inverse ETF. We are placing DUST on the watchlist. Trade details are available to our subscribers in the watchlist section of the newsletter.
Since rallying above its 20-day EMA on June the 21st, the Direxion Daily Gold Miners 3x Bear ETF (DUST) has been consolidating along this key mark. If DUST can form either a reversal candle (see pink candlestick) or an “inside” candlestick (see blue candlestick), then it could present a buying opportunity above the three day high of $50.25. We will be monitoring DUST closely for a possible long entry.
On Friday, the ProShares UltraShort MSCI Emerging Markets ETF (EEV) consolidated near the highs of Thursday’s powerful move. EEV may provide a buying opportunity if it continues to consolidate near the two day high and forms a pivot, such as a bullish pennant. We will be monitoring this inverse ETF closely for a potential buy entry.
In recent weeks, the S&P MidCap 400 has been the weakest of all of the major indices. Yesterday, it was the only index to close below its 200-day MA. Because of this relative weakness, we are looking to enter a position in the ProShares UltraShort MidCap 400 ETF (MZZ). The only way to enter this trade and keep the reward to risk ratio favorable, is to buy it on a pullback. We are adding MZZ to the watchlist. Trade details are available to our subscribers in the watchlist segment of the newsletter.
Over the past three weeks, the PowerShares DB US Dollar Bull ETF (UUP) has sold off and pulled back into support of its 50-day MA. Over the past two sessions, UUP has tested support at this key moving average. UUP offers a potential long opportunity above the two day high of $22.53. We are placing UUP on the watchlist. Trade details are available to our subscribers in the watchlist segment of the newsletter.