SPDR S&P 500 ETF meeting resistance at $210.00

May 30th, 2016 – 1 Comment

Range bound for close to a year


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Today I will continue with the analysis of several Exchange Traded Funds on task from Roger. Today I will inspect the case for the SPDR S&P 500 ETF (SPY NYSE). I have provided a link to the members of the index if you are so inclined to look into the companies included.

http://markets.ft.com/research/Markets/Tearsheets/Constituents?s=INX:IOM

The rationale for investing in ETF’s is that they provide diversification and passive management. When you own an ETF there are no active decisions made by stock pickers unless you have bought into an active ETF management service provided by money managers who are independent of the ETF sponsor. At times member companies are dropped and others added to replace them but that is usually driven by the criteria for inclusion in the index.

An examination of the charts for SPY will identify the trend, support, and resistance associated with these units.

 

 

SPY

The three-year chart indicates that since May of 2015 SPY has been meeting resistance near $210.00. A range bound pattern with resistance near $210.00 and support near $180.00 has been in play for nearly a year offering some trading opportunities as the units have oscillated through the range two times. The MACD and the RSI provided buy signals in August of 2015 and January of 2016 when the units touched $180.00. The double bottom that formed in early 2016 added further support to a buy decision at that time.

 

 

 

 

SPY2

The six-month chart pulls focus on the buy signals generated by the MACD and the RSI in February and the nice run to resistance near $210.00 by mid April. If SPY is going to start a new up leg it will have to break through $210.00 with conviction. The dividend yield on SPY is 2.10% so you will get paid to hold the units but think about looking for a better entry point.

 

Next time I will audit the particulars surrounding the Vanguard FTSE Europe ETF (VGK NYSE).

 

Make it a profitable day and happy capitalism!

 

 

Categories: ETF
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