More Tech ETFs At 50-Day

The tech-focused tradable funds led
the exchange-traded funds while selling pressured the defensives.

The Broadband HOLDR
(
BDH |
Quote |
Chart |
News |
PowerRating)
gained
7.3%, the day’s biggest gain among the exchange-traded
funds
. The basket of high-bandwidth providers now has compiled a 97
href=”/.site/Funds/feducation/all/02292000-4499.cfm”>relative
strength score for the past month. Note that it is nearing its 50-day
moving average.

The basket got a lift from
semiconductor and optical leaders. Applied Micro Circuits
(
AMCC |
Quote |
Chart |
News |
PowerRating)
gained
14.2%, PMC-Sierra
(
PMCS |
Quote |
Chart |
News |
PowerRating)
14.7%, Ciena
(
CIEN |
Quote |
Chart |
News |
PowerRating)
7.8%, JDS Uniphase
(
JDSU |
Quote |
Chart |
News |
PowerRating)

11.7%, Corning
(
LW |
Quote |
Chart |
News |
PowerRating)
6.7%. For more on the action in semis, see my analysis
of Ultratech Stepper
(
UTEK |
Quote |
Chart |
News |
PowerRating)
in Trading
The News
.

The Internet Infrastructure HOLDR
(
IIH |
Quote |
Chart |
News |
PowerRating)

moved ahead 6.8%, the Semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating)
5.2%, the Internet
Architecture HOLDR
(
IAH |
Quote |
Chart |
News |
PowerRating)
4.5%, the Internet HOLDR
(
HHH |
Quote |
Chart |
News |
PowerRating)
4.4%, the Nasdaq
100 Tracking Stock
(
QQQ |
Quote |
Chart |
News |
PowerRating)
3.3%, the Dow Jones Technology iShares
(
IYW |
Quote |
Chart |
News |
PowerRating)

3.2%, the Technology SPDR
(
XLK |
Quote |
Chart |
News |
PowerRating)
3.1%.

On the downside, the Biotech HOLDR
(
BBH |
Quote |
Chart |
News |
PowerRating)

lost 5.0%, forming a bearish engulfing. The Software HOLDR
(
SWH |
Quote |
Chart |
News |
PowerRating)
dropped
3.0%, the Dow Jones Energy iShares
(
IYE |
Quote |
Chart |
News |
PowerRating)
2.6%, the the Pharmaceutical HOLDR
(
PPH |
Quote |
Chart |
News |
PowerRating)
2.5%, the Dow Jones Healthcare iShares
(
IYH |
Quote |
Chart |
News |
PowerRating)
2.4%, the Consumer
Staples SPDR
(
XLP |
Quote |
Chart |
News |
PowerRating)
1.1%.

Exchange-traded funds combine traits
of stocks and mutual funds. Like mutual funds, an ETF represents diversified
ownership in a number of different stocks, reducing company-specific
risk. Like stocks, ETFs trade on exchanges, nearly all of them in fact trade on
the American Stock Exchange. 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. 

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 href=”/.site/stocks/education/strategies/05262000-6129.cfm”>Moving
Average Crossovers. I also recommend newcomers read my tutorial, href=”/.site/stocks/education/strategies/06272000-6815.cfm”>Trading
HOLDRs: Unique Opportunity And Risk.

All stocks and exchange-traded funds
are risky. In any new trade, reduce your risk by limiting your position size and
setting a protective price stop where you will sell your new buy or cover your
short in case the market turns against you. For an introduction to combining
price stops with position sizing, see my lesson,
Risky Business
. For further treatment of these and related topics,
you’ll find extensive lessons in the Money
Management
area of TradingMarkets’ Stocks Education section.