Power ETF Setups
February 28, 2022
Below are various ETFs that caught our eye during our research process that might be worth a closer look. It is certainly not an exhaustive list, but should give plenty of names to review and develop a plan around based on your trading style and strategies.
Major high pre-breakout setups and current day Breaks
FCG OIH MOO PSCM IGF RTM KIERYF KBWP XME EZA EIDO EWU EWC
Minor breakouts in a larger range or consolidation in an uptrend
GDX XOP RYE VDE RYH IFRA IHF VAW REMX PSCE ILF GXG GREK
Breakout setup from a consolidation after a downtrend
Pullback in Trend
Pullback to potential support zones in an established trend
AMLP IAI RYU PBJ VDC RHS KBE KRE EWZ
RSI Bull Range Test
Daily or Weekly pulling back to test RSI 40 while in a Bull Range
SMH VGT RYT FIVG PEJ IGN CARZ IDRV VCR ITY LEGR VIS VNQ RGI RCD REZ GRID VHT VPU PSCC PSCF IHE WOOD LIT ITB URA
RSI Bull Range Shift
Emerging trend with RSI setup to move over 60 after a Bear Range
Extreme oversold showing short term change in character
IGV XSW IBB FDN HACK PSCH SOCL TAN CGW ICLN
All downside setups for near term potential weakness.
Below are verious names that caught out eye during our research process that might be worth a closer look. It is certainly not an exhaustive list, but should give plenty of names to review and develop a plan around based on your trading style and strategies.
iShares MSCI Indonesia ETF is in a nice bull range on both the daily and weekly. During the consolidation it never lost its daily or weekly bull range with multiple tests of the 40 level. The weekly has a cup and handle pattern breakout forming. The bottom left chart shows a weekly candle dating back to the Covid 2020 lows. The VWAP from that point has been support three times on each of the lows of pullback showing that buyers are willing to step in and buy on weakness. The lower right chart shows the most recent pullback being bought right at the 50 day moving average. This ETF has the chance to breakout to new highs Monday as it’s less than one ATR away.
Dynamic Leisure and Entertainment is in a fresh RSI bull range with two successful weekly bull range tests. The VWAP from the 2020 lows is where buyers pushed price higher late January. Now, the trading range is between the downward sloping trend line and the VWAP. With a closer look on the daily. we see that PEJ made a higher high and a lower low recently with an intraday shakeout at the lows. By closing above this obvious support zone, it signals further strength for the buyers. The daily chart shows choppiness around the MA bands. It would be good to see a breakout from the weekly trendline, with upward sloping MA bands along with another higher high and internal breakout.
Global Lithium & Battery Tech ETF is at an RSI weekly bull range test. This will show if this is a retracement within a long-term uptrend, or a change in the long-term trend toward the downside. The VWAP from the 2020 lows has been where buyers pushed price higher on pullbacks twice with the most recent being Thursday. For this to be a bullish setup it would be good to break above the MA bands where it has rolled over twice, and for price to be able to stay above the VWAP from the highs.
iShares Latin America 40 ETF can be considered an internal breakout on a short time frame, or a pullback in trend for the weekly/daily. A VWAP pinch setup is one where the swing high VWAP and swing low VWAP “pinch” price between a narrow range. The lower left chart shows that as price is in a range between the two points. The MA bands on the daily show the trend in a clear and simple way. There were four rallies into them during the downtrend. Then the trend changed and there have been two tests during the recent uptrend. This shows the change in character after a sustained downtrend.
MSCI Greece ETF tested its bull range on Thursday on a gap down. It rallied hard from that level and regained the MA bands as well. The weekly chart shows a nice base forming with two recent tests of the RSI bull range. The bottom left chart shows the VWAP from the recent swing low acting a support at the low of the current formation. That’s a positive as buyers were unwilling to let the gap down further push the ETF lower. Relative strength has picked up nicely year to date while U.S. equities have struggled.
Natural Gas ETF has been a clear leader and looks to be setting up another flag breakout at the highs. The Relative comparative has been on a steady trend of higher highs and higher lows supporting the move all the way up. On the 65 minute cchart it currently is moving through the upper rail of the flag. continuation here would not be surprising. You can work against the quarterly AVWAP off the lows for now.
Equal Weight Technology ETF is trying to work off a failed breakdown last week at support and now finds itself challenging a polarity level to start this one. This comes with an RSI divergence at the level, but the failed break down action is more important. On the weekly RSI chart we see it is testing the RSI bull range. It did fall through the MA bands on the weekly, but if this range test holds, maybe they can be remounted on this reflex action. This is an early spot since we are still under the 200 day moving average, but the relative comparatives have have been improving for a bit and the SPY relative comparative diverged with the failed break down as well. Looking at the 65 minute chart, I would make it clear and hold the 292 level before getting to involved as it still is the most beaten down sector at the moment, so lets not get ahead of ourselves too much.
Aerospace and Defense ETF is readying a big weekly break of the upper rail on the long flag. on the Daily the RSI is now testing the 60 level for the 3rd time this move and looks to gap above the level to start the week. the Weekly never lost the RSI bull range during the flag and is back over 50 now. Looking in the lower left, the relative comparatives are breading downtrends and have been outperforming for since the start of the year, well before Russia/Ukraine got on the radar, that just added fuel to help the move. It also recently cleared the 200 day moving average which had capped the moves higher for a while now. On the 65 minute level it is above the AVWAPs and the 5day moving average, so those can be used as short-term guides as the action plays out.
The charts and tickers above are for educational purposes and are not recommendations to do anything. This is just to help show you what we see and then let you take it from there and do your own due diligence. Either build your own trade plan or get with your advisor or broker form one before considering any ideas above.