Here's what two said about a few ETFs that have held up better than the market but that they expect will catch up with the march south soon.
John Lansing, a technical analyst and founder of Trending123.com, recommends shorting three ETFs: John Lansing, a technical analyst and founder of Trending123.com, recommends shorting three ETFs:
Internet Holdrs (HHH) rebounded from the November sell-off on low volume. It hangs deep below its 40-week moving average and broke below its 10-week moving average last week. Lansing's downside target is 23.
The fund has held up better than most lately because of the strength in the two largest holdings: Amazon.com (AMZN) is weighted at 37% and Yahoo (YHOO) at 22%.
Amazon gapped up 18% on monster volume Jan. 30. It continued to climb the next week but on decreasing volume. It's hit resistance at its 40-week moving average. On a weekly chart, it has formed two lower highs and two lower lows since peaking in October 2007 at 101.09.
Since Nov. 20, Yahoo rallied off a five-year low of 8.94 on waning volume. It closed Wednesday at 13.16, above its 10-week average, but deep below the 40-week line.
iShares Nasdaq Biotechnology (IBB) is still above its November low of 57.14 after three days of heavy selling last week. It rose 2% Wednesday. Volume was above average but below the sell-off's level. Lansing expects the ETF to undercut=2 0its November low and head to the low 40s.
The ETF's two largest holdings among 136 are Amgen (AMGN), weighted 12.43%, and Gilead Sciences (GILD) at 11%. Both broke below their 40-week averages last week on large volume.
Teva Pharmaceutical (TEVA), the third largest holding, is struggling to hold above its 40-week line. It has formed two lower lows and lower highs on the weekly chart since the stock topped a year ago.
Retail Holdrs (RTH) appears to have found support at its November low of 60.63. But Lansing believes its next stop will be the low 40s. Trading volume on down days has swamped volume on up days for the past two months, indicating heavy institutional selling.
Its largest stock is Wal-Mart (WMT), weighted at 27%. It's formed a bearish head-and-shoulders top pattern after hitting a six-year peak of 63.85 in September. The stock has undercut its October low and trades below both the 40- and 10-week moving averages.
RTH's second-largest stock, Home Depot (HD), has trended below its 40-week average since July 2007. It reached a 12-year low of 17.05 in October.
