Since the fourth quarter last year XSD has done extremely well moving from a low of $41 last July to $52.30 for an increase of 27.56%. Along the way XSD has broken through three consecutive double tops and is trading above its bearish resistance line.
Moving Averages: 50 day $51.29 | 200 day $49.75
(Click image for larger view)
DE Smith of MyPortfolioView
Most investors are unaware that the Dow Jones Industrial Average and the Diamond (DIA) exchange-traded fund that tracks it is price-weighted. This means that the higher a stocks price, the higher the weighting it will have in the index and ETF basket.
The new NYSE Arca Tech 100 (NYSE:Arca:NXT) ETF is also price weighted but comes with some other bells and whistles which are sure to attract attention. Unlike the QQQQ, it includes companies from all ther major exchanges and avoids companies with low liquidity as well as too much concentration in any one sector or subsector. Will McClatchey, Editor of ETFzone notes that the companies in this new ETF basket tend to be more evenly distributed than the case with QQQQ and compares it favorably to the First Trust NASDAQ-100 Equal Weighted (NASDAQ:QQEW - News).
Avoiding too much expsoure to giant Microsoft is probably a good idea depending on the timing. While QQQQ's top holding s are Microsoft 6%, Apple 6%, and Qualcomm 5%, NXT has as its top holdings, IBM 3.1%, Lockheed, 3% and Apple, 2%.
By Carl Delfeld of the Chartwell ETF Advisor
IShares Dow Jones US Technology Index (IYW) has built a nice buffer above its bullish support line. Currently IYW is off its January high but has recently reversed back into demand status [Column of X’s]. The top holdings are weighted nicely with Microsoft taking the lion share.
Moving averages: 50 day $54.63 | 200 day $52.29
Click on image for larger view:
By DE Smith of MyPortfolioView
During the recent global pullback in exchange-traded funds or ETFs, technology has demonstated relative strength.
Standard & Poor's estimates the technology sector will have earnings in 2007 of $4.11 in Q1; $4.46 Q2; $4.59 Q3; and $5.33 Q4. The Q4 is very strong, a 16 percent improvement from Q3 after good prior quarterly advances. In fact, most of the ten industrial sectors in Standard & Poor's 500 Index have good earnings gains estimates for 2007, especially the energy and financial services sectors.
Max Issacman of East/West Securities in an article for ETFZone describes four of the many choices investors have in ETF's for IT representation is the Nasdaq-100 ETF (NASDAQ: QQQQ - News); Select Sector SPDR (AMEX:XLK - News); PowerShares Value Line Timeliness Select Portfolio (AMEX: PIV - News), which is 21.48 percent tech; and PowerShares Dynamic OTC Portfolio, (AMEX:PWO - News), which is 50.52 percent tech.
By Carl Delfeld of the Chartwell ETF Advisor
What do you know about the exchange-traded fund QQQQ? Well, you should know that it is by far the most actively traded exchange-traded fund or ETF and the top five holdings are Microsoft, Qualcomm, Apple, Intel and Google. The top ten holdings of this ETF basket account for 40% of your exposure. These holdings are recognizable, and owned by millions of investors. But just because these are well established and world known companies doesn’t mean you shouldn’t keep an eye on them if you have this ETF in your portfolio.
Example: The above chart is a point and figure chart which is tracking the overall value of 100 shares of QQQQ since January 2006. The green shaded line in the middle of the chart highlights the cost basis. Columns of X’s represent demand and always are read in an upward direction. O’s represent supply and are read top down. The numbers 1-9 represent January – September and A, B, and C stand for October, November and December. The value of these 100 shares were off their cost basis by 12% in July 2006. Demand took back control and moved this ETF up from a -12% to a +10% in three short months. Since that time QQQQ has struggled to maintain positive momentum. As of today this position with a purchase price of $40.65 back on January 3, 2006 is in a column of O’s holding on to a 6.10% gain.
By DE Smith of MyPortfolioView.com
By Carl Delfeld of the Chartwell ETF Advisor
Before you buy your next exchange-traded fund or ETF, make sure you look under the hood and see what is in the basket of securities. And remember, names can be deceiving.
Dan Culloton of Morningstar recognizes that there aren't many pure nanotechnology plays out there, for example, and the few that exist, such as Nanophase Technologies (NasdaqGM:NANX - News) or Altair Nanotechnologies (NasdaqCM:ALTI - News), can best be described as unprofitable nanofirms. That explains why a lot of big companies whose main business isn't nanotechnology show up in PowerShares Lux Nanotech Portfolio (AMEX:PXN - News) such as General Electric (NYSE:GE - News), Hewlett-Packard (NYSE:HPC - News), and Toyota Motor (NYSE:TM - News). These companies are researching ways to use nanotech to improve everything from aircraft engines to printer ink to car components, but those efforts are often small parts of their operations.
Another example Culloton describes is the Technology Select Sector SPDR (AMEX:XLK - News), for example. The sector bellwethers are there-- Microsoft (NasdaqGS:MSFT - News), Cisco Systems (NasdaqGS:CSCO - News), and Google (NasdaqGS:GOOG - News)--but so are a couple of massive telecommunications service providers. Indeed, AT&T (NYSE:T - News) and Verizon Communications (NYSE:VZ - News) are both top-10 holdings and help give this fund a bigger telecom stake than any other conventional or exchange-traded technology fund.
