Key U.S. stock index funds were quiet Wednesday as traders awaited release of the Fed minutes.
Biggest sector gainers included semiconductor, real estate and metals miners. SPDR S&P Metals & Mining (XME), featured in Tuesday’s picks, rose nearly 1%. VanEck Vectors Semiconductor (SMH) and iShares PHLX Semiconductor (SOXX) each rose 0.6%. Component stocks Applied Materials (AMAT) and Nvidia (NVDA) gained about 1% apiece.
Retail, banks and biotechs underperformed. SPDR S&P Regional Banking (KRE) and SPDR S&P Bank (KBE) fell 0.9% and 0.7%, respectively. Both are holding above their 200-day moving average lines. SPDR S&P Retail (XRT) lost 1.5% and was seeking support at its 50-day line.
Bitcoin Investment Trust (GBTC) sank 5%, sliding further below its 50-day line. The volatile ETF, which offers exposure to the price movement of Bitcoin, is 40% off its recent high but still up more than 400% this year.
Niche Plays Near Buy
While many U.S. diversified stock funds are extended from recent buy points, two niche plays that hold American Airlines (AAL), Delta Air Lines (DAL) and Cisco Systems (CSCO) may be getting close to potential breakouts.
U.S. Global Jets (JETS) is shaping the right side of a shallow cup-shaped base. The ideal buy point would be 32.93, or a dime above the left-side high, unless shares pause to form a handle. In that case, the buy point would become the high of the handle, plus 10 cents. JETS soared 11% after a May breakout from a cup with handle to the start of the current base in mid-July.
The ETF’s shares gapped up 2% Tuesday, boosted by component stock American Airlines and United Continental (UAL), which surged 5% each. The carriers’ Q3 unit revenue forecasts were better than expected.
JETS, which launched in April 2015, has attracted $115.4 million in assets. It tracks the U.S. Global Jet Index and offers exposure to airline operators and manufacturers around the world. Its top holdings as of Oct. 9 were Delta Air Lines, American, United and Southwest Airlines (LUV), at roughly 12% apiece. U.S. companies accounted for 80% of total assets.
A 12.5% year-to-date return through Oct. 9 trails the S&P 500’s 15.4% gain, according to Morningstar Direct. The ETF’s one-year return of 34.3% outpaces the benchmark index’s 20.6% gain. It carries a 0.60% expense ratio.
IBD’S TAKE: On the hunt for ETF ideas that may be worth a closer look? Check out IBD’s weekly ETF Leaders column for a featured fund and a list of highly rated ETFs.
Another niche ETF that’s nearing a buy point is ETFMG Prime Cyber Security (HACK). Shares are about 2% below a 31.45 flat-base entry. The fund advanced nearly 5% from an early May flat-base breakout to the start of the current pattern.
It’s up 3% from Sept. 7, when Equifax (EFX) announced a major cybersecurity breach of up to 143 million Americans. That likely fueled interest in HACK, which invests in companies that provide hardware, software, consulting and other services to help fight cybercrime. It tracks the Prime Cyber Defense Index.
HACK’s YTD return through Oct. 9 is 16.6%; its one-year return is 12.5%. The $1.1 billion ETF, which marks its third anniversary in November, bears a 0.60% expense ratio.
Of Tuesday’s picks, SPDR S&P Metals & Mining (XME) is still working on the handle of a saucer with a 33.53 buy point, while iShares MSCI Global Metals & Mining Producers (PICK), remains in a buy zone from a 31.14 entry.
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