What's Worth Buying This Week? ETF Tracking Dow Transports

The Dow Jones Transportation Average ended last week with a positive weekly technical chart, even though the index remains in bear market territory. 

By contrast the big guys -- the Dow Jones Industrial Average (INDU) , the S&P 500 and the Nasdaq Composite (NDAQ)  -- have negative weekly charts in correction territory, while the Russell 2000 has a negative but oversold weekly chart and is in bear market territory.

Here's last week's stock market scorecard followed by the exchange-traded funds that allow you to trade these averages like a stock.

 

Here's the weekly chart for the SPDR Dow Jones Industrial Average ETF (DIA) , known as Diamonds, which is the exchange-traded fund for the Dow 30.


Courtesy of MetaStock Xenith

The weekly chart for Diamonds is negative, but will shift to positive given a close on Friday above its key weekly moving average of $164.63, but if the close is below its 200-week simple moving average of $158.15, the outcome is negative. The weekly momentum reading ended last week at 31.09 down slightly from 31.44 on Feb. 12.

Investors looking to buy Diamonds should enter a good till canceled limit order to buy this ETF if it drops to $161.40, which is a key level on technical charts until the end of February. Investors looking to reduce holdings should enter a GTC limit order to sell this ETF if it rises to $177.66, which is a key level on technical charts until the end of March. The downside risk is to $145.61 for the remainder of 2016.

Here's the weekly chart for the SPDR S&P 500 ETF Trust (SPY) , known as Spiders.


Courtesy of MetaStock Xenith

The weekly chart for Spiders is negative but will shift to positive if the EFT closes on Friday, Feb. 26 above its key weekly moving average of $193.04, but if the close is below 200-week simple moving average of $179.36, the outcome is negative. The weekly momentum reading ended last week at 28.83 down from 30.17 on Feb. 12.

Investors looking to buy Spiders should enter a good till canceled limit order to buy this ETF if it declines to $179.36, which is the 200-week simple moving average. Investors looking to reduce holdings should enter a GTC limit order to sell this ETF if it rises to $214.64, which is a key level on technical charts until the end of March. A key level of $191.83 should be a magnet until the end of February.

Here's the weekly chart and how to trade the PowerShares QQQ Trust ETF (QQQ) .


Courtesy of MetaStock Xenith

The weekly chart for the QQQs is negative with this ETF below its key weekly moving average of $103.23 with its 200-week simple moving average a major support of $87.74. The weekly momentum reading ended last week at 24.28 down from 27.69 on Feb. 12.

Investors looking to buy QQQs should enter a good till canceled limit order to buy this ETF if it declines to $92.75 and $91.33, which are key levels on technical charts until the end this week and the end of 2016, respectively. Investors looking to reduce holdings should enter a GTC limit order to sell this ETF if it rises to $106.06, which is a key level on technical charts until the end of February. A key level of $96.72 should act as a magnet for all of 2016.

Here's the weekly chart for the iShares Transportation Average ETF (IYT) , which is the ETF for Dow transports.


Courtesy of MetaStock Xenith

The weekly chart for Transports is positive if the ETF above its key weekly moving average of $128.60 and above its 200-week simple moving average of $128.18. The weekly momentum reading rose last week to 26.06 up from 21.21 on Feb. 12.

Investors looking to buy transports should enter a good till canceled limit order to buy this ETF if it declines to $123.82 which is a key level on technical charts until the end of 2016. Investors looking to reduce holdings should enter a GTC limit order to sell this ETF if it rises to $136.24, which is a key level on technical charts until the end of 2016. A key level of $128.81 remains in play until the end of February.

Here's the weekly chart for the iShares Russell 2000 ETF (IWM) , which is the ETF for small caps.


Courtesy of MetaStock Xenith

The weekly chart for small caps is negative with the ETF below its key weekly moving average of $102.95 and below its 200-week simple moving average of $105.57. The weekly momentum reading closed last week at 20.03 down from 21.90 on Feb. 12.

Investors looking to buy the small cap ETF should enter a good till canceled limit order to buy the ETF it drops to $94.44 and $93.42, which are key levels on technical charts until the end of February and the end of 2016, respectively. Investors looking to reduce holdings should enter GTC limit orders to sell this ETF if it rises to $103.68, which should be a magnet all year. 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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