Sell on the Pop Prospects: January 25 Edition

Here is a look at ETFs that currently offer attractive short selling opportunities. The ETFs included in this list are rated as sell candidates for two reasons. First, each of these funds is deemed to be in a downtrend based on the fact that its 50-day moving average is below its 200-day moving average, which are popular indicators for gauging long-term and medium-term trends, respectively. Second, each of these ETFs is also trading above its 20-day moving average, thereby offering a near-term ‘sell on the pop’ opportunity given the longer-term downtrend at hand. Note that this prospects list also features a liquidity screen by excluding ETFs with average trading volumes below the one million shares mark. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques. To get access to all ETF Database premium content, sign up for a free 14-day trial to ETF Database Pro. 80 ETFs made it to the list of sell on the pop prospects this month. The market indices closed higher (month on month) amid China’s reopening and the expectation of lower rate hikes. Several oil-focused funds like United States Oil Fund (USO B) and ProShares Ultra Bloomberg Crude Oil (UCO A) topped the sell on the pop list with ~15% and ~13% annual returns. Oil prices gained driven by optimism around China’s demand recovery and on hopes of the Fed slowing the pace of interest rate hikes. Many commodity funds such as Invesco DB Commodity Index Tracking Fund (DBC A), First Trust Global Tactical Commodity Strategy Fund (FTGC ), and Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC ) also made it to the list. Many emerging market ETFs like iShares Latin America 40 ETF (ILF A+) and iShares MSCI Brazil ETF (EWZ A-) featured on the sell on the pop list driven by retreating U.S. dollar, China’s reopening, and higher commodity prices. Several bond ETFs such as Vanguard Short-Term Government Bond ETF (VGSH A+), iShares 1-3 Year Treasury Bond ETF (SHY A-), and Schwab Short-Term U.S. Treasury ETF (SCHO A-) were present in this month’s sell on the pop list as U.S. Treasury yields moved downward amid the Fed signaling a rate hike slowdown in the future. Check out our bond ETF list here. Many ETFs that track the S&P 500 Index like iShares Core S&P 500 ETF (IVV A), SPDR S&P 500 ETF (SPY A), and Vanguard S&P 500 ETF (VOO A) also made it to the list as many S&P 500 sectors rose last month, with communication, energy, and real estate giving high single-digit returns. Stocks gained on signs of easing inflation and a strong CPI report. Many technology-focused funds like Direxion Daily Technology Bull 3X Shares (TECL A-), Direxion Daily Semiconductor Bull 3X Shares (SOXL B+), MicroSectors FANG plus Index 3X Leveraged ETN (FNGU B), and Daily Dow Jones Internet Bull 3X Shares (WEBL C) ranked among the sell on the pop list after Fed signaled a rate hike slowdown (a hike of 25 basis points in the future lower from the anticipated 50 bps). Technology stocks got a boost as investors shook off some anxiety, driven by hopes of a smaller interest rate hike in the future supported by a strong CPI report. To compare this month’s list with the one published on December 28, click here. ETFs to Sell on the PopPlease note that this list is updated on a monthly basis. For more ETF analysis, make sure to sign up for our free ETF newsletter. Disclosure: No positions at time of writing.