ETF Outlook for Tuesday February 25, 2014 (IWC, XLB, UGA, GXF)

ETF Outlook for Tuesday February 25, 2014

iShares Russell Microcap Index ETF IWC

The large-cap stocks broke out today with the S&P 500 touching its highest level ever. However, for the year the index remains lower by one point. The microcap stocks on the other hand continue to outperform the large-cap stocks again this year as measured by IWC. The ETF  is up 3.4 percent in 2014 and is closing in on the all-time high set in January. The ETF is now overbought and could see some healthy selling in the coming days before attempting a breakout, but the trend remains very bullish.

SPDR Materials ETF XLB

The ETF traded 2 pennies above the all-time high from 2008 on Friday before closing in the red. Yesterday the ETF came with 4 cents of the all-time high again before closing near the low of the day. Add in an RSI that is overbought and moving lower and the odds are a pullback is in store for the ETF. Another red flag is the volume, which was more than double yesterday as the selling picked up near the end of the trading day. Support on XLB is at the $45 area in the event the chart is correct and a pullback is imminent.

United States Gasoline ETF UGA

The average U.S. price for a gallon of gasoline has risen for 17 straight days, the longest streak since May. The increase has added 15 cents to the price per gallon, however the price still remains 36 cents below the high of last year. UGA closed at a multi-month high last week and has been consolidating at the area for the last couple of days. If the ETF can hold above $60/share it could push the price back to the next resistance level of $64.

Global X FTSE Nordic Region ETF GXF

The Nordic countries closed out a strong showing at the Winter Olympics and the countries continued to celebrate Monday as GXF rallied 2 percent to a new all-time high. The breakout on Monday was significant because the ETF has struggled to break above $24.75 for the last few months before the big move. The one issue with GXF is that it only traded 2,800 shares on Monday, which could make it difficult for investors to initiate large positions. The ETF is heavily weighted towards Sweden (53 percent) and also has exposure to Denmark, Norway, and Finland.