Big Blue Rallies Tech ETFs
Strong earnings from Big Blue big the
latest catalyst Thursday to renew cash flows into technology, lifting the
tech-focused exchange-traded funds.
The Internet Architecture HOLDR
(
IAH |
Quote |
Chart |
News |
PowerRating)
gained 6.5%, the day’s sharpest gain among the exchange-traded
funds. The HOLDR closed just shy of its 50-day moving price
average.
The basket got a lift from IBM
(
IBM |
Quote |
Chart |
News |
PowerRating),
which late Wednesday reported Q4 net income $1.48 a share vs. $1.12 a share and
estimates averaging of $1.46, according to First Call/Thomson Financial. Big
Blue gapped up and ran 12% on triple average volume. Among other components, Apple Computer
(
AAPL |
Quote |
Chart |
News |
PowerRating)
rose 12.2%,
Adaptec
(
ADPT |
Quote |
Chart |
News |
PowerRating) 8.1%. Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating) 7.4%.
The Nasdaq 100 Tracking Stock
(
QQQ |
Quote |
Chart |
News |
PowerRating)
gained 6.4%, clearing its 50-day. The Dow Jones Technology iShares
(
IYW |
Quote |
Chart |
News |
PowerRating)
moved ahead 6.0%, the Semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) 5.5%, the Broadband HOLDR
(
BDH |
Quote |
Chart |
News |
PowerRating)
5.3%, the Technology SPDR
(
XLK |
Quote |
Chart |
News |
PowerRating) 5.3%, the Software HOLDR
(
SWH |
Quote |
Chart |
News |
PowerRating) 4.9%.
The financials backpedaled. The
Regional Banking HOLDR
(
RKH |
Quote |
Chart |
News |
PowerRating) lost 2.1%, the Financial SPDR
(
XLF |
Quote |
Chart |
News |
PowerRating) 1.5%,
the Dow Jones Financial Servicies iShares
(
IYG |
Quote |
Chart |
News |
PowerRating) 1.4%, the Dow Jones
Financial iShares
(
IYF |
Quote |
Chart |
News |
PowerRating) 1.3%.
The top field of all charts in this
commentary uses a logarithmic price scale and displays a 50-day price average in
red. In the second field, a
blue relative strength line represents the displayed security’s price
performance relative to the S&P 500. The third field displays vertical daily
volume bars in black with a 50-day moving average in blue for volume.
Exchange-traded
funds combine traits
of stocks and mutual funds. Like mutual funds, an ETF represents diversified
ownership in a number of different stocks, greatly reducing company-specific
risk. Like stocks, ETFs trade on exchanges, nearly all of them in fact trade on
the American Stock Exchange at present. They quote throughout the day, enabling
traders to take advantage of intraday price moves.
If you’re new exchange-traded funds,
be sure to visit TradingMarkets’ Knowledge Center,
dedicated to explaining the basics of trading and active investing in ETFs and
mutual funds. Just click on the Funds tab
near the top of this page, then click on the Knowledge
Center tab.Â
You also will find lessons on trading
exchange-traded funds in the Stocks Education area of TradingMarkets.com. In
particular, check out my three-part series on trading ETFs, starting with
Average Crossovers. I also recommend newcomers read my tutorial,
HOLDRs: Unique Opportunity And Risk.
Â
Â