Tuesday, February 21, 2017

Telecommunications (IYZ) Looks Promising

Things are a little slow at the moment and I think everyone can understand why. The price to earnings ratio of the market continues to get out-of-hand with a lot of index stocks moving sideways. In the larger market a little pullback is expected (Elliot Trade Theory published a fantastic article on the subject) but among all this downward pressure Telecommunications ETF IYZ seems to be making in-roads for a possible rise with the EMA(5) crossing above the EMA(8). Looking at it's chart It entered a corrective phase just under two months ago. It's currently stuck in a downward channel with upward resistance at around $34.75. For me this simple EMA move signals a possible buy with a confirmation coming from a momentum indicator. The next few days will be critical, but depending on your appetite for risk a small purchase can be made now with another purchase after the break above resistance.