Pullback buy entry in Uranium ETF (URA) – The Wagner Daily
The Wagner Daily – February 14, 2011
Concise technical analysis and picks of the leading global ETFs
Commentary:
For a second consecutive day stocks rallied impressively into the close. However, Friday’s trade was light. The major indices all finished higher, with the Russell 2000 leading the way. The small-cap index gained 1.1% yesterday. The S&P MidCap 400 finished a close second, as it posted a 1.0% gain on the session. The Nasdaq, the S&P 500 and the Dow Jones Industrial average rallied by 0.7%, 0.6% and 0.4% respectively.
Turnover fell sharply on Friday. Volume fell by 18% on the Nasdaq and 7% on the NYSE. However, Advancing volume finished the day higher than declining volume by a factor of 2.6 to 1 on the NYSE and 1.6 to 1 on the Nasdaq.
GDX hit its tight stop on Friday and we exited the position. GDX is still exhibiting the characteristics of a good short candidate and we may very well reenter the trade if a setup presents itself.
In the February 3rd newsletter we commented, “The Global X Uranium ETF (URA) broke out on massive volume two days ago (02/01/11). A pullback/undercut of the 20-period EMA ($21.50-$21.75 range) on the hourly chart below may provide a long entry trigger for this ETF. We will be following it closely for a possible entry”. Since then, URA has pulled back and undercut the 20-period EMA on the hourly chart. A move back above $21.70 may present a buy entry for this ETF. We are placing URA on the watchlist. Trade details are available for our subscribing members in the watchlist segment of the newsletter.
Hourly chart from February 3rd newsletter:
The Market Vectors Gaming ETF (BJK) has been consolidating since mid January above support at $31.80. A volume assisted rally above $32.50 may present a buy trigger for this ETF.
The DB Gold Double Short ETN (DZZ) has been consolidating along its 50-day MA after pulling back from a big breakout move. A rally back above $8.75 could present a buying opportunity for this ETF.
Although divergence continues among various ETF groups, the broad market appears to have repaired itself quite a bit over the past several trading sessions. Most of our short term technical signals point to another move up for the market.
Deron Wagner is the Founder and Head Portfolio Manager of Morpheus Trading Group, a capital management and trader education firm launched in 2001. Wagner is the author of the best-selling book, Trading ETFs: Gaining An Edge With Technical Analysis (Bloomberg Press, August 2008), and also appears in the popular DVD video, Sector Trading Strategies (Marketplace Books, June 2002). He is also co-author of both The Long-Term Day Trader (Career Press, April 2000) and The After-Hours Trader (McGraw Hill, August 2000). Past television appearances include CNBC, ABC, and Yahoo! FinanceVision. Wagner is a frequent guest speaker at various trading and financial conferences around the world, and can be reached by sending e-mail to: deron@morpheustrading.com.
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