ETFdb Analyst Picks: Optimism Fuels Rebound

by on December 13, 2012 | ETFs Mentioned:

And just like that domestic equities have recovered their post-election losses. Following Obama’s re-election investors and media headlines focused their attention on the lingering “fiscal cliff”, sparked a rapid sell-off. A little over a month has passed and politicians are still gridlocked in Washington D.C., and while the “fiscal cliff” is that much closer, stocks have managed to discount the lack of a fundamental  improvement and rebound higher. Improving employment data and solid GDP have certainly served as positive catalysts over the past month, however, it’s fair to say that optimism has largely driven markets higher on the hopes that our policymakers will strike a deal before we drive off the cliff [see Free 7 Simple & Cheap All-ETF Portfolios].

Analyst Recommendations

Below, we highlight how the ETFdb Analyst Picks have been performing, noting any important fundamental catalysts while also keeping an eye on key technical levels for our recommendations.  As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques:

ETFdb Analyst Pick #1: Long XLU

Utilities Select Sector SPDR
Recommended Price $36.76
Current Performance -3.9%

Performance Recap

Overblown “fiscal cliff” woes sunk this ETF far below its 200-day moving average, however, buying pressures were quick to resurface given the fundamentally defensive nature of utilities stocks. Although this recommendation is still in red territory, XLU has staged an impressive rebound off its lows of $33.85 a share on 11/15/2012; furthermore, this ETF appears to be climbing higher within a tight, upward slopping channel, which showcases the sheer interest among bargain buyers.

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Disclosure: No positions at time of writing.