Basic Materials made our emerging buys list in last week’s sector scorecard. This week we find Materials ETFs running upfront with the leading performing exchange-traded-funds.
It is somewhat surprising to Top Equity News that materials are in-style. Global headlines are bold with proclamations of a recession starting or underway in Europe, and one of the biggest consumers of materials, China, headed for a hard or soft economic fall.
Regardless of what’s happening on the ground, the saying goes. “The tape doesn’t lie.” And right now, the following Materials ETFs are coloring the tape green.
- PowerShares Dynamic Basic Materials (PYZ)
- PowerShares S&P SmallCap Materials (PSCM)
- iShares Dow Jones US Basic Materials (IYM)
- First Trust Materials AlphaDEX (FXZ)
- Vanguard Materials ETF (VAW)
TEN’s favorite ingredient in the stew of these ETFs is Westlake Chemical Corp. (WLK). Not only is it in the general materials sector, but much narrower sub-sector of specialty chemicals made the buy lists too – a twofer.
The manufacturer of basic chemicals, vinyls, polymers, and fabricated polyvinyl chloride (PVC) building products’ chart looks enticing. WLK’s shares jumped out of a box that’s been in place for the last 6 1/2 months. Surpassing multiple tops can be a powerful buy-signal and is sure to catch the eye of momentum investors.
Investors are also likely see Westlake’s 12 and 26 day averages racing away from the 50 day-benchmark. These important trend-lines are baked up with a healthy increase in volume; which means institutional money is pouring in.
From a purely technical point of view, WLK’s price appears to be on the way to $51ish. If the market continues its push through earnings season, $55 could come into focus rather quickly.
On the downside, a stop loss order at $41.90 is about as much risk as TEN would be willing to take. Westlake closed Tuesday at $43.87.
We will see you tomorrow with a Trading Earnings pick for next week.
ETF X-Ray: A Material Difference is an article from: 
