Breakout: ETFs on the Verge of Big Things (HAO, FCG, KBE)

With stocks continuing to grind higher, latecomers to the party might be feeling as if they missed out on some good moves. They have, but hey, no one is perfect and the good news is there's a fair amount of non-leveraged ETFs that are worth a look right now. By "worth a look," we mean those funds that are still a considerable distance away from their 52-week highs and that are on the verge of significant technical breakouts. There's more good news: The five ETFs we've selected that meet the aforementioned criteria would make for a diverse portfolio on their own as various sectors and countries are found in our group. Guggenheim China Small Cap ETF HAO The Guggenheim China Small Cap ETF has surged almost 50% off its October bottom and that statistic might keeping new capital on the sidelines regarding this fund. That's understandable, but remember: Chinese ETFs have been strong this year, emerging markets in general have impressed and small-cap funds have been stout as well. HAO has that combination. It has the potential for significant upside if it can crack $24 on strong volume. Asking for the 52-week high of just over $30 in the near-term might be a little greedy, but a move to the high $20s in the next couple of months isn't out of the realm of possibility. First Trust ISE-Revere Natural Gas Index Fund FCG FCG is useful for a surprising amount of sub-plots in the energy space, not the least of which is increased mergers and acquisitions activity and the move by many companies away from natural gas production to increased oil output. So on those two points alone, FCG has merit. The ETF has been a solid, but not yet jaw-dropping performer in 2012 and that's actually appealing. Should FCG clear $20, an area that proved to be serious resistance three times last year, seeing this ETF go to $22-$23 is plausible. SPDR S&P Bank ETF KBE Resurgent bank stocks have been a nice bonus for wary investors in 2012 and for those that just couldn't decide which one to settle on, ETFs have served their purpose. With KBE up almost 13% year-to-date and almost 33% since October, it would be wise to wait for the ETF to clear what is proving to be some stiff resistance around $22.60. KBE has been able to peak through a couple of times recently, but can't stick above an uptrend line. That's what needs to happen for a legitimate breakout to be confirmed here. Market Vectors Junior Gold Miners ETF GDXJ Now this is one that run hard and fast should it clear its next major technical hurdle. After struggling to keep pace with bullion for almost all of 2011, mining ETFs have gotten their acts together in 2012. GDXJ recently emerged from a reverse head and shoulders formation and is now dealing with some resistance just pennies above current levels. That's not the only hurdle. The ETF also needs to reclaim its 200-day line just below $31 and $31 looks like horizontal resistance. In other words, if GDXJ can accomplish all of those feats, it would be an overtly bullish sign. Global X FTSE ASEAN 40 ETF ASEA Another ETF that has a solid fundamental resume ASEA has been having a solid, but unspectacular 2012 by the standards of emerging markets ETFs. A strong volume move above $16.40 could lead to upside of 10% from there.