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IGW and SMH Look Most Promising of Sector ETFs

Aug. 29, 2005 11:52 PM ETSMH, SOXX
Tate Dwinnell profile picture
Tate Dwinnell

The following table shows the ETFs with greatest demand (as measured by price and volume movement over the past 20 trading days), writes Tate Dwinnell at Canslim Investing. The DI score (for 20 and 40 trading days) is a proprietary indicator of SelfInvestors.com and measures price and volume movements. The higher the score, the healthier the demand.

Of course this indicator is best used in conjunction with other information, such as where the price is in relation to key support and resistance levels (such as the 50 and 200 DMA), which can be seen in the last 2 columns.

For example, BHH is showing great demand over the last 2 months, but currently sits below resistance of the 200 day moving average. This could indicate that a bottom has been found, but probably still too early to initiate a position. Particularly of interest to me are the ETF's showing great demand, above both support levels, but very near the 50 day moving average. So I'll pull up the charts of IGW, LQD, IGE, EWM, EWA and GLD to see if the price is moving up from below or dropping to meet support of the 50 day moving average. I focus on stocks/ETF's that are dropping to meet support after rising above. The only ETF I would eliminate from considering for a long position is LQD which has to prove itself above resistance of the 50 day moving average.

Of the group, the Ishares Semiconductor ETF (IGW) looks the most promising to me, surprisingly enough. Both the Ishares (IGW) and Holders Trust Semi (SMH) have held up very well during the recent downturn and continue to look strong.

Ticker Name Current Price DI20 DI40 % From 50DMA % From 200DMA
BHH HLDRS B2B Internet 2.16 17 19

This article was written by

Tate Dwinnell profile picture
Tate Dwinnell is an independent investment analyst who, after spending time as an analyst for CANSLIM.net, developed his own websites with the goal of empowering the self investor and helping to level the playing field between professionals and individuals. Tate currently runs a membership advisory service at SelfInvestors.com, an award winning investing blog, a general ETF portal at ETFFundInvesting.com and a portal focused on Oil ETFs at OilETFCentral.com . Tate's newest venture at GreenStocksCentral.com is quickly becoming one of the top portals around for everything related to green energy investing.

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