Top 20 And Bottom 20 ETFs By Technical Ranking

 |  Includes: AMJ, EPHE, GDX, IBB, THD, XLV
by: Richard Shaw

For investment horizons out a few months, technical ratings from services such as StockCharts and BarChart can be helpful. It's important to note that technical ratings don't speak about the long-term future.

While technical ratings often are labeled short-term, medium-term and long-term, those labels tend to apply to time frames in the broad vicinity of 1 month, 3 months and 6 months. Unfortunately, words like "long-term" have entirely different meanings for different investors, and certainly many fundamentally oriented investors, as opposed to momentum-oriented investors, would not consider 6 months to be long-term at all.

This technical look at the highest rated ETFs according to StockCharts, with associated BarChart ratings is a direct look at which of them are hot and which are not at this time.

In addition, for investors who prefer individual stocks, the same rankings give valuable insight into which sectors and industries are rated as strong and weak.

The trend of the sector and industry is a powerful force that fundamentally strong individual stocks have a really hard time overcoming if the trend is negative, and from which fundamentally weak stocks tend to get a bit of a free ride.

As the saying goes, "a rising tide raises all boats, and an ebbing tide lowers all boats."

Note: The ETF universe considered excludes inverse and ultra ETFs. Top ranked ETFs had StockCharts scores of >90 out of 100, and bottom ranked ETFs had scores of <10 out of 100. We selected the top 20 from each group by ranking them by the dollar trading volume on the most recent market day. The technical rating criteria for Stock Charts and BarChart are provided at the bottom of the article.

Figure 1: Top 20 ETFs By StockCharts Ranking

Top 20 StockCharts Technical Rating(>90)
Symbol Name $ Vol/Min
GDX Gold Miners 1,787,921
SLV Silver 1,175,244
EWW Mexico 579,358
XHB Homebuilders 519,134
XLV Health Care 425,790
UNG Natural Gas 335,261
EPI India 310,415
IBB Biotech 295,691
EWG Germany 224,870
ITB U.S. Home Construction 139,379
EWH Hong Kong 121,178
KBE Major Banks 94,935
IYZ Telecomm 89,535
PCY EM Sovereign Debt 53,770
PIN India 50,716
PPLT Physical Platinum 45,030
AMJ Alerian MLP ETN 40,165
REM Mortgage REITs 36,716
THD Thailand 32,186
RWX International Real Estate 30,198
Click to enlarge

We identified THD as attractive in a prior article about country funds that included capture ratio spreads as one of the evaluation criteria.

Figure 2: BarChart Buy, Sell, Hold For Top 20 ETFs

Click to enlarge

Figure 3: Bottom 20 ETFs By StockCharts Ranking

Bottom 20 StockCharts Technical Rating (<10)
Symbol Category $ Vol/Min
EWZ Brazil 1,946,879
USO Oil 618,380
XME Metals & Mining 418,376
EWJ Japan 324,582
OIH Oil Services 301,696
SMH Semiconductors 188,551
EZA South Africa 93,938
FXA Currency - Australian Dollar 85,408
UUP US Dollar Index - Up 78,126
OIL Oil 37,726
SOXX Semiconductors 33,373
DBO Oil 19,151
HDGE Bear Hedge 15,952
KOL Coal 9,733
EDIV Emerging Mkt Dividends 9,218
JO Coffee ETN 8,567
DXJ Japan Dividends 8,566
SLX Steel 8,219
IEZ U.S. Oil Equipment & Services 7,476
XSD Semiconductors 5,674
Click to enlarge

Figure 4: BarChart Buy, Sell, Hold For Bottom 20 ETFs

Click to enlarge

Figure 5: Some Additional Top ETFs

These few supplemental country funds didn't make the top 20 due to lower per minute trading volume, but they are interesting enough to be mentioned in a supplemental list.

Supplemental StockCharts Technical Rating(>90)
Symbol Name $ Vol/Min
EPHE Philippines 17,330
EGPT Egypt 3,417
ENZL New Zealand 2,931
NORW Norway 1,354
EIRL Ireland 736
Click to enlarge

We identified EPHE as attractive in a prior article about country funds that included capture ratio spreads as one of the evaluation criteria.

Figure 6: BarChart Buy, Sell, Hold For Supplemental Top ETFs

Click to enlarge

Figure 7: StockCharts Rating Criteria

StockCharts evaluates each stock on these technical criteria and then rank them against members of their peer group.

Link to its description of its method.

Figure 8: BarChart Rating Criteria

Unlike StockCharts, which provides relative ratings, BarChart provides an absolute rating. They equal weight each indicator in each of the short-term, medium-term and long-term categories, then offset the Buys by the Bells to get a net rating of Buy, Sell or Hold.

Link to its description of its method.

It describes TrendSpotter this way: "TrendSpotter is a computerized trend analysis system, developed by The system uses a combination of wave theory, market momentum and volatility in an attempt to find a general trend for a specific market. TrendSpotter attempts to cut losers early and let winners run."

Disclosure: QVM has positions in IBB, AMJ, THD and EPHE as of the creation date of this article (October 7, 2012). We certify that except as cited herein, this is our work product. We received no compensation or other inducement from any party to produce this article, but are compensated retroactively by Seeking Alpha based on readership of this specific article.

General Disclaimer: This article provides opinions and information, but does not contain recommendations or personal investment advice to any specific person for any particular purpose. Do your own research or obtain suitable personal advice. You are responsible for your own investment decisions. This article is presented subject to our full disclaimer found on the QVM site available here.