Below The 200-Day Line And Looking Fine

Some end-of-quarter window dressing has the major U.S. indexes and plenty of ETFs sitting within earshot of their February peaks, so now investors are faced with the challenge of finding some value in the ETF universe. Of course, there's a significant difference between finding value and falling into a value trap. On a technical basis, using an ETF's 200-day moving average has merit when it comes to finding breakout candidates, but if you're going to get involved with an ETF that is well below its 200-day line, the key is making sure the ETF is a legitimate bullish target, not bound for more declines. With that the universe of ETFs trading below their 200-day moving averages is actually quite large at nearly 200, but filter out bond funds and inverse plays, and the universe shrinks dramatically. Let's have a look at four plain-vanilla long equity ETFs that are currently trading below their 200-day moving averages that might offer some upside over the medium-term. 1) Market Vectors Egypt ETF EGPT: No surprise here given the calamity Egypt faced during the February. An extended closure of Egypt's major stock exchange and some rocky trading once it reopened have weighed on EGPT, but the ETF bounced 5.5% last week and now rests a bit more than $2 than below its 200-day line. Support looks to $15.25, so the risk-reward could be viewed as favorable here. 2) Global X China Consumer ETF CHIQ: Like many other emerging markets ETFs, CHIQ has started to perk up recently, but still faces considerable headline risk with regards to Beijing's efforts to stem inflation. CHIQ has another 70 cents to go before reaching its 200-day line. If it conquers that level, another $2-$3 of upside could be had. 3) Global X Uranium ETF URA: Talk about headline risk, URA's dour story is now known to the world as the ETF has been punished mightily at the hands of Japan's nuclear fallout. This is probably the most speculative member of the list, but perhaps also the ETF with the most potential to deliver big upside for the patient investor. URA has another $4 to run to its 200-day moving average. 4) EGShares India Small Cap ETF SCIN: Like every other ETF tracking India, SCIN has bounced in a big way recently, but the ETF is still about $2 below its 200-day line. Given the favorable sentiment that has emerged in recent weeks toward India-specific ETFs, SCIN may be the best overall play on this list. SCIN could run back to its November peak around $26 if the market cooperates.