Gold and Brazilian Stocks: Two ETF Opportunities for Traders
Most of the time when we are talking about short-term trading, we are talking about short-term trading of individual stocks. But the growing liquidity of exchange-traded funds makes them viable candidates for short-term trading, as well.
Fortunately for traders, there are two exchange-traded funds with the kind of high Short Term PowerRatings that will make them attractive candidates for short-term trading by many traders looking to play a bounce in either gold shares or the stocks of companies doing business in Brazil.
The goal of the Market Vectors Gold Miners ETF
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PowerRating) is to track the price and yield of those publically traded gold and silver mining companies in the AMEX Gold Miners Index. The AMEX Gold Miners Index includes many more gold and silver mining companies compared to other popular, tradable indexes such as the Amex Gold Bugs Index ($HUI) and the Philadelphia Gold and Silver Index ($XAU).
The stock is trading in the middle of its 52-week price range from
$54.23 and $32.76. During yesterday’s sell-off, GDX became dramatically oversold, with its Relative Strength Index values dropping to 4.98. The last time the RSI was this low in GDX was in mid-December, when it dropped to 4.80. Eight days later, the ETF was up more than 9%. GDX has also recently suffered four down days in a row, and is some 11% off its mid-January high.
The other opportunity for traders lies in the iMSCI Brazil Index Fund
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PowerRating). Like the Market Vectors Gold Miners ETF, the iMSCI Brazil Index Fund has a PowerRating of 8, making the exchange-traded fund one of the more attractive stocks available to traders right now.
The iMSCI Brazil Index Fund is an exchange-traded fund designed to track the price and yield performance of stocks in the MSCI Brazil Index. This index consists of publically-traded stocks on the Brazil stock exchange. Major holdings include Petrobras, CIA Vale do Rio Doce, and Banco Bradesco, which through ADS and preferred stock account for more than 54% of the fund, with most of the fund’s exposure being to materials, energy and finance.
The stock is trading in the upper half of its 52-week price range from $87.67 and $39.80. EWZ has fallen from a mid-December high near
$87 to its most recent close of $70.18 as the stock nears its 200-day moving average. Based on its RSI values, the exchange-traded fund is oversold
— though not as much as it was in early January, when an RSI reading of 2.74 led to a five-point rally in three days.
