This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Price Averages Can Predict ETF Winners

Stocks in this article: SHV TIP SIJ

TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

Trying to figure out which exchange traded funds to buy? Most speculative investors know that analysis based on quarterly earnings is too slow to generate viable signals.

That's why many turn to "technical analysis," which focuses on a security's price movements. These methods help investors spot price trends so they can try to go along for the ride. Ratings

Two of my favorite strategies compare a security's average price over different time periods, a measure known as its "moving average."

One indicator that's useful for short-term trading evaluates the moving averages of two time periods. When the fast average, the one with fewer trading days, surpasses the longer, slow average, it suggests upward momentum. When the slow average moves ahead of the fast one, it's a sign of potential bearishness.

I also favor the "moving average convergence divergence" indicator, a more complicated measure that's commonly referred to as the MACD. In short, this approach compares exponential moving averages, which give more importance to recent price data, of different time periods to find turning points in prices.

Based on those measures, it might be time to sell these ETFs: the iShares Barclays Short Treasury Bond Fund (SHV), the iShares Barclays U.S. Treasury Inflation Protected Securities Fund (TIP), the ProShares UltraShort Industrials Fund (SIJ) and the Direxion Daily Small Cap Bear 3X Shares Fund (TZA).

These ETFs have five-day moving averages that lag their 10-day averages. Their MACD indicators have been offering sell signals for the past two days.

Technical analysis suggests these funds have more potential to gain: the iShares S&P Target Date 2030 Index Fund (TZL), the Claymore/Zacks Mid-Cap Core ETF (CZA), the First Trust Financials AlphaDEX Fund (FXO) and the SPDR Dow Jones Mid Cap Value ETF (EMV).

These ETFs have five-day moving averages that moved ahead of their 10-day averages, and MACD indicators that show it might be time to buy.

Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,055.99 +2.28 0.01%
S&P 500 2,092.59 +3.82 0.18%
NASDAQ 4,810.4870 +3.6280 0.08%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs