Potential Long Buy Candidates With These ETFs (USO, DVY, DIA, SPY)
Stocks recovered from Tuesday’s distribution day but trade was light. In a reversal of Tuesday’s performance, the small-cap Russell 2000 led the move higher, as it tacked on 1.1%. The S&P MidCap 400 added 1.0%, while the Nasdaq improved by 0.9%. The S&P 500 (NYSEArca:SPY) and the Dow Jones Industrial Average (NYSEArca:DIA) improved by 0.7% and 0.6% respectively. Home construction, home improvement retailers and financials showed relative strength, while non ferrous metals, gold and airlines underperformed.
In Tuesday’s newsletter we commented that the United States Oil Fund (NYSEArca:USO) may be a pullback long candidate. Yesterday, USO undercut its 20-day EMA for a second consecutive day and held this support level. Further, USO rallied to close near session highs. A move above yesterday’s high of $40.74 could provide a buy entry trigger in this ETF.
The iShares Dow Jones Select Dividend Index (NYSEArca:DVY) has pulled back and held support just above its 50-day MA over the past two sessions. Yesterday, DVY formed a reversal candle as it retested Tuesday’s low. A volume fueled move above the two day high of $55.11 could present a buying opportunity in this ETF.