ETF Outlook for Friday December 13, 2013

ETF Outlook for Friday December 13, 2013

Market Vectors Egypt ETF EGPT

A gain of 2 percent yesterday sent the ETF to its highest level of the year as the broader global markets continued their pullback. The geopolitical concerns that ravaged the country a few years ago have been out of the headlines for quite some time and investors are willing to put money back into the country. A close above $55 would be the confirmation of a breakout for EGPT today or next week. The risk is that the government is still not stable and that more unrest could wreak havoc on the country.

iShares MSCI Sweden Index ETF EWD

Sweden is the latest country to break through support yesterday when the ETF fell by 2 percent. The close was the lowest in over two months and the next level of support to watch on the ETF is near the $32 area. Also having a rough day yesterday was the Rydex CurrencyShares Swedish Krona ETF FXS, which lost 1.1 percent and is at a new three-week low. The one potential bright spot for EWD is that the ETF is now extremely oversold and could see a bounce back today or in the coming days.

iShares Dow Jones Transportation Average Index ETF IYT

The ETF was able to buck the downtrend yesterday and closed with a gain of 0.2 percent. The small gain kept the ETF above price support and the 50-day moving average ($124.94) and formed a doji pattern on the chart. Add in the oversold reading on the RSI that is turning higher and the ETF is looking like a technical buy. The ETF is heavily invested in the railroads, delivery services, airlines, and trucking. The largest holdings are Union Pacific UNP andFedex FDX. 

iShares Dow Jones U.S. Regional Banks Index ETF IAT

The regional banks are one area that could benefit when the tapering begins and interest rates increase. If the yield curve steepens it could be a positive for regional banks that generate a large portion of their revenue via lending. Yesterday IAT was up 0.75 percent as the SPDR Financial ETF XLF closed unchanged. There could be a continued flow of money into the regional banks as the Fed moves closer to the announcement of a taper and as interest rates begin to rise. IAT is only down 1.3 percent from a five-year high and is one of the strongest sector ETFs in the market.