Always consider hidden risks
Internet Stocks (FDN ETF): Is this a Bubble ?
August 05 2016 (From TradingView )
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The Internet Index Fund FDN (First Trust Dow Jones Internet Index Fund)
performance since bottoming out in February 2016 is astonishing with +37.3% (excluding dividends) compare to the Mighty SP500 Index
(SPY ETF) at only +19.5% and the Nasdaq ETF QQQ at + 21.9% as of
August 4 2016.Not surprising you can say with Facebook and Amazon as there top
holdings (for FDN ETF). The beta of 1.23 (vs 1 for SPY ETF) and the
standard deviation is +17.6% (vs +11.1% for SPY ETF) shows how
risky and volatile is that sector...
The FDN ETF is within a huge uptrend channel that started back on the week of November 17 2008. Also, we are within a smaller uptrend channel that started back on February 8 2016 week. (See 1rst chart below - channels ).The highest price ever on that FDN ETF was reached on December 2 2015 at 78.09. Closing price on August 4 2016 was 77.72, very close of the all time high. Take note that already the SPY ETF and QQQ ETF made new highs lately, so the Internet Index Fund seems to only catching up as sectors rotation kicks in...
The three Weekly Previous Peak Prices on the Internet Index Fund FDN near/over the Resistance of that Main Uptrend Channel was on March 3 2014 week at the 65.79 level, on August 3 2015 week at 73.81 and on November 30 2015 week at 78.09. (See 1rst chart below - channel and ellipse ). The Weekly target to reach that Main Resistance is around 80.85, so we are still far of reaching that zone...According to that, reaching the top of the weekly channel since November 2008 trend looks like a short term bubble ready to bursts. But looking at two other technical indicator can change the idea about the FND ETF.Internet Stocks outperformed since February 5 2016 the Mighty SPY ETF; it is still within the huge Uptrend Channel that started back since November 2008 but far from the resistance of that channel and far from the already high ever on a relative performance vs SPY ETF. ( Relative basis FDN ETF over SPY ETF Ratio). (See 2nd chart below - Channel - Ellipse)
Internet Stocks outperformed since February 5 2016 the Mighty QQQ ETF (Relative basis FDN ETF over QQQ ETF Ratio). after testing the Major Support Trendline that started back since November 2008 from the Uptrend Channel. (See 2nd chart below) Not only it outperformed, it broke the Resistance Trendline that started back since March 2014!. (See 2nd chart below - Red Trendline - Ellipse)As the Internet stocks are a little expensive price wise because getting near the top of the Major Uptrend Channel (80.85 ish), we are far on a relative basis compare to the whole SP500 Index and Nasdaq 100 Index. The Internet sector remain a very aggressive stance on the market (high beta and standard deviation); as long as the Bullish sentiment prevail, it is ok. It is not yet a bubble...
Internet Stocks (FDN ETF): Is this a Bubble ? $SPY, $QQQ #trading #internet #qqq #sp500 #stocks #investing
FDN ETF over QQQ ETF
(First Trust Dow Jones Internet Index Fund)
FDN ETF over SPY ETF