Spotlight on ETFs:
Roth MKM has identified promising opportunities in the ETF market, singling out the iShares Biotechnology ETF (IBB) and the iShares Expanded Tech-Software Sector ETF (IGV) as candidates for significant upward movement. In contrast, another fund faces the possibility of downward trends.
Market Insights:
As outlined in a recent technical strategy note, Roth MKM expressed concerns regarding market breadth, particularly with the S&P 500 heading into the historically robust month of July. Over the past two decades, July has shown an average stock increase of 2.3%. The note also highlighted the underweight status of the Health Care (XLV) sector, noting that a breakout in biotech could generate positive momentum.
iShares Biotechnology ETF (IBB):
With the price of the iShares Biotechnology ETF (IBB) hovering just below a critical resistance level at $140, Roth MKM anticipates a potential surge to $160 upon breaching this barrier. Despite some reservations about the breadth of support, Monday saw the ETF trading above $137.
iShares Expanded Tech-Software Sector ETF (IGV):
Roth MKM’s analysis of The iShares Expanded Tech-Software Sector ETF (IGV) suggests that surpassing the $90 mark would pave the way for substantial upward momentum. Should IGV exceed $90, the short-term target price ranges from $100 to $105. As of Monday, the ETF was valued around $87.
iShares U.S. Home Construction ETF (ITB):
However, a note of caution surrounds the iShares U.S. Home Construction ETF (ITB), as recent price action indicates a potential formation of a topping pattern. While currently above its rising 200-day moving average, a drop below $100 could expose ITB to downside risks, potentially dipping to approximately $90. During Monday’s session, the ETF was trading above $98.
