Quite a number of my ETFs got hammered in the October downturn and many have not yet recovered. This has set up a number of trade possibilities for the start of the week. I may or may not enter the trades outlined below but so far I have offers in on a couple of these set to go for Monday morning. I consider all of these except for XLU to be speculative in nature. I prefer individual stocks over ETFs primarily because individual stocks are much easier to read and dissect.
Technical indicators on ETFs are not as reliable as they are on individual stocks primarily because ETFs are made up of a basket of stocks and one or two stocks can impact an ETF which is difficult for technical indicators to take into account. So while one or two stocks could be strong and pulling the ETF higher, the remaining ones could be negative or neutral but the technical readings look good because of the one or two stocks. When they turn, then the ETF can really be hammered which the technical indicators did not advise would happen. It is something to be aware of when trading ETF through the use of technical indicators.
4 ETF Trade Ideas
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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.