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Basic materials ETF’s Heating Up

June 14th, 2009

shovelAndrew Leckey from the Chicago Tribune interviewed a few people, including Jack Kasprzak from BB&T Capital Markets, to determine why basic-materials stocks have been a hot investment in recent months. Jack stated “About $29 billion in the U.S. stimulus package is dedicated to road construction, and about half that money has specific time deadlines for bids. The time-sensitive nature of the stimulus plan has again focused investors on the basic-materials space. When you think about the economy over the next two years, it is pretty obvious that to generate economic activity the infrastructure and public works segment is an area to focus on.” Andrew found that Mr. Kasprzak considers exchange traded funds to be the best way for people to invest in this group.

Andrew, further into the story, goes on to interview others that dive into the impact that the economic stimulus programs in the US and China will have on Steel, Concrete oil etc. Their feelings are that the demand for these materials will pick up in the second half of the year, and to invest in companies with multinational exposure. Andrew’s example: Materials Select Sector SPDR ETF (XLB) who’s top holdings are: Monsanto Co., DuPont, Praxair Inc., Newmont Mining Corp. and Dow Chemical Co.  We might suggest looking into the following ETF’s as well: iShares S&P Global Materials (MXI), ProShares Ultra Basic Materials (UYM), iShares Dow Jones U.S. Basic Materials (IYM).

For the whole story click: HERE

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A Market Club smartscan analysis of each ETF noted above can be found below:


SECTOR SPDR TRUST MTRL ETF (PACF:XLB)
Smart Scan Chart Analysis confirms that a strong uptrend is in place and that the market remains positive longer term. Strong Uptrend with money management stops. A triangle indicates the presence of a very strong trend that is being driven by strong forces and insiders.Based on a pre-defined weighted trend formula for chart analysis, XLB scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend):
     
+10 Last Hour Close Above 5 Hour Moving Average
+15 New 3 Day High on Thursday
+20 Last Price Above 20 Day Moving Average
+25 New 3 Week High, Week Ending June 13th
+30 New 3 Month High in June
+100 Total Score
iShares S&P GBL MATER SC (PACF:MXI)
Smart Scan Chart Analysis confirms that a strong uptrend is in place and that the market remains positive longer term. Strong Uptrend with money management stops. A triangle indicates the presence of a very strong trend that is being driven by strong forces and insiders.

Based on a pre-defined weighted trend formula for chart analysis, MXI scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

     
+10 Last Hour Close Above 5 Hour Moving Average
+15 New 3 Day High on Thursday
+20 Last Price Above 20 Day Moving Average
+25 New 3 Week High, Week Ending June 13th
+30 New 3 Month High in June
+100 Total Score
PROSHARES ULT BASIC MTRL (PACF:UYM)
Smart Scan Chart Analysis confirms that a strong uptrend is in place and that the market remains positive longer term. Strong Uptrend with money management stops. A triangle indicates the presence of a very strong trend that is being driven by strong forces and insiders.

Based on a pre-defined weighted trend formula for chart analysis, UYM scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

     
+10 Last Hour Close Above 5 Hour Moving Average
+15 New 3 Day High on Thursday
+20 Last Price Above 20 Day Moving Average
+25 New 3 Week High, Week Ending June 13th
+30 New 3 Month High in June
+100 Total Score
iShares DJ US BASIC MATERIALS (PACF:IYM)
Smart Scan Chart Analysis confirms that a strong uptrend is in place and that the market remains positive longer term. Strong Uptrend with money management stops. A triangle indicates the presence of a very strong trend that is being driven by strong forces and insiders.

Based on a pre-defined weighted trend formula for chart analysis, IYM scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

     
+10 Last Hour Close Above 5 Hour Moving Average
+15 New 3 Day High on Thursday
+20 Last Price Above 20 Day Moving Average
+25 New 3 Week High, Week Ending June 13th
+30 New 3 Month High in June
+100 Total Score


ETF BASIC NEWS, NYSE:IYM, NYSE:MXI, NYSE:UYM, NYSE:XLB


 

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