• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Three ETFs Showing Renewed Strength
Stock

Three ETFs Showing Renewed Strength

by April 1, 2023
by April 1, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

With the first quarter of 2023 drawing to a close, what impresses me most about the equity markets are the improving breadth conditions. While the markets can move higher on strength from the MANAMANA stocks, sustained bull market phases usually need additional support from other stocks.

One could argue that stocks like MSFT and AAPL represent enough market cap that they can single-handedly drive the benchmarks higher, and that is arguably what we saw earlier in March. But, by this Friday’s close, improving breadth conditions indicate that it’s not just the FAANG stocks anymore. This is a broad advance with an opportunity to push well above S&P 4100.

Why SPX 4100 Matters

The S&P 500 ended the quarter around 4110. That is right about the same level where the SPX was at six weeks ago. And the same level as four months ago. And also seven months ago. And eleven months ago. That’s right, our most followed benchmark is at the same place it was almost one full year ago, in the bear market phase of 2022.

So with all of the uncertainty, all the volatility, and plenty of upside and downside catalysts, the overall market trend has been sideways for almost a year!

When a market becomes rangebound, I find it helpful to use a “stoplight” approach, using support and resistance levels. At what level would the market look bullish if it reached above? And what level would need to be broken on the downside to confirm a bearish phase? Anything in between remains in the neutral category.

The 4100 level became extra significant in November, as it represented the first big up thrust off the October low. I see the February breakout as a failed breakout above that established resistance level.

Once again, we are testing resistance at 4100. Will the S&P 500 have enough upside momentum to power through this level to 4200 and beyond? It will need to be driven by not just the FAANG stocks, but by other names, represented by the ETFs listed below!

The Continued Strength of Technology

While semiconductors have been one of the strongest groups around, driven by solid charts like NVDA, I was impressed to see the Video Gaming and eSports ETF (ESPO) on my new swing highs list this week.

What’s really interesting about this ETF, besides the fact that it demonstrates a clear bullish bias with rising price and relative strength, is that two of its top five holdings are semiconductors! That’s right, NVDA and AMD are both top holdings in this ETF. Another great reminder of the value of due diligence on ETFs to be clear on what stocks are included!

But the strength in ESPO is not just due to the semiconductor holdings. Stocks like EA and ATVI have started to breakout to the upside, pushing above established bases and indicating a new bull phase in progress.

Non-US markets have benefitted from a weaker US Dollar, so I was not surprised to see a number of European equity ETFs in the top decile of our SCTR ETF rankings. Germany, France, Spain, Ireland, and Denmark are all toward the top of the entire iShares family of ETFs this week.

Here’s a pan-European ETF which is back to testing resistance around $50. Note the higher low in mid-March, the upward-sloping 200-day moving average, and the RSI, which bottomed out recently around 40. These are all signs of a bullish trend phase.

Participation From Lagging Sectors

Perhaps the most convincing bullish argument here comes from the improvement in charts of sectors like financials, which have been lagging behind the FAANG sectors. The XLF rallied into the weekend after bouncing off support in the $30-31 range.

I’ve added the PPO indicator on this chart to illustrate how the recent rally could be another rally phase similar to previous recoveries off the lows. Bottoms in June and October of last year were soon followed by PPO buy signals as buyers bought in on price weakness. Charts like the XLF moving higher in April could provide the additional upside momentum for our equity benchmarks, as some of the beaten-down sectors are seeing additional demand as well.

Given the inverted yield curve, the uncertainty of the 2023 financial crisis, and recessionary risks, significant upside for stocks seems unlikely. But for now, the charts are telling me that a broad advance is in place and S&P 4100 may be just the beginning.

What do you see coming next for the S&P 500? In my latest video, I break down four potential scenarios and the technical and macro implications for each. Which do you see as most likely, and why?

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!

David Keller, CMT

Chief Market Strategist

StockCharts.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

You Might Also Like
  • MUST SEE Updates to RRG Charts on StockCharts!
  • Your Selling Methodology is Your Paramedic to Profits
  • David and Goliath, or the Small vs. Large Caps
  • Top 10 Stock Charts For May 2025: Breakouts, Trends & Big Moves!
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Trump to travel to New York City Monday before Tuesday arraignment, return to Florida hours later
next post
MEM TV: S&P 500 Puts in a Bottom!

You may also like

Looking Outside the Stock Market for Opportunities

October 26, 2023

The Ord Oracle September 11, 2023

September 12, 2023

Identifying Powerful Trends with This Game-Changing ADX Setup

February 15, 2024

GNG TV: Enough Leadership for Bull Market After October Lows?

January 19, 2023

Why Market Conditions Are Not Yet Bullish

April 15, 2023

When to Buy in May

May 2, 2023

NVDA at a Crossroads: Decoding the Signals From Atop a...

March 30, 2023

Distribution Alert: QQQ Looks Top-Heavy as Energy Stocks Gush Higher

August 6, 2023

Managing Fear and Expectations

March 23, 2023

Week Ahead: NIFTY’s Behavior Against This Level To Influence Trends...

December 21, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,630 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    The Only Setup That You’ll Ever...

    July 13, 2023

    Will Technology Drive S&P Higher in...

    October 3, 2024

    Dow Bounces Off Support: A New...

    August 9, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here