Stocks got off to a hot start on Monday and didn’t slow down much throughout the session. With that in mind, let’s look at a few top stock trades for the rest of the week.
Look at how well Square (NYSE:SQ) stock traded from April through August. The 10-day moving average continued to guide the stock higher, as did uptrend support (blue line).
Shares faltered in early September, breaking below these trend marks. It’s worth noting that eventually this type of price action is bound to happen. A stock cannot rally forever.
Thankfully, the 50-day moving average stepped in as strong support, propping Square stock up until it was able to reclaim the 10-day moving average. On Monday, the stock was able to break out over its prior highs and the 261.8% extension.
If we are going back to a trending market, look for dips down to the 10-day moving average to be bought and for SQ stock to push higher. Specifically, let’s see if it can rally to the three-times range extension near $197 and tag $200.
Top Stock Trades for Tomorrow No. 2: Regeneron (REGN)
Regeneron (NASDAQ:REGN) shares ripped higher on Monday, ending the day up more than 7%. The rally was enough to send the stock over a few key levels.
Specifically, Regeneron stock was able to reclaim the key $575 level, downtrend resistance (blue line) and the 10-day and 50-day moving averages. What a move — but now it needs to hold.
Gallery: 5 of the Best International ETFs to Buy for Diversification (InvestorPlace)
Exchange-traded Funds (ETFs) are an increasingly popular investment vehicle. Because it is so difficult for retail investors to pick individual stocks that beat the performance of a benchmark index such as the S&P 500, many people are choosing instead to invest in ETFs that track the market such as the SPDR S&P 500 ETF (NYSEARCA:SPY) that tracks the S&P 500 stock index, or the Invesco QQQ (NASDAQ:QQQ) that tracks the performance of the Nasdaq. ETFs can also track a number of stocks in a particular sector such as technology. In 2019, assets held in U.S.-based ETFs reached a record $4 trillion. More money is now invested in ETFs than hedge funds. ETFs are known as a passive investment as they are not actively managed by a fund manager. Shares of ETFs are traded on exchanges just like a stock and rise or fall along with the market or sector they are tracking. ETFs are also cheaper to own than mutual funds that are actively managed and charge high management expense fees. The combination of low fees and market matching performance have made ETFs very popular with investors. And while many of the top performing ETFs are focused on U.S. markets and economic sectors, there are a number of international ETFs that offer solid returns and can provide diversification to a portfolio. Here we look at seven of the best international ETFs for investors to buy for diversification. Invesco China Technology ETF (NYSEARCA:CQQQ) Vanguard FTSE Europe ETF (NYSEARCA:VGK) Schwab Emerging Markets Equity ETF (NYSEARCA:SCHE) ProShares Ultra MSCI Brazil Capped (NYSEARCA:UBR) Global X FTSE Nordic Region ETF (NYSEARCA:GXF)
Best International ETFs: Invesco China Technology ETF (CQQQ)
Expense Ratio: 0.7%, or $70 annually per $10,000 investment There’s a lot of growth potential and risk with Chinese technology companies. On one hand, China is the largest and fastest growing market in the world. On the other hand, Chinese companies have a track record of accounting irregularities, fraud and embezzlement. Given this quandary, one of the best ways to invest in the potential growth of China while mitigating the risk is to invest in the country and its top tech companies through an ETF. And the Invesco China Technology ETF, known as CQQQ, is one of the very best. The CQQ ETF provides investors with access to major Chinese technology companies such as Tencent, Baidu and NetEase, while alleviating the risk of placing money directly into each individual stock. And the CQQQ has been providing great returns to investors, up 20% year-to-date and 40% over the last 12 months. Over the past 10 years, CQQQ has posted an average annual return of 11.8%. Ten thousand dollars invested in CQQQ in 2010 would be worth $30,523 today.
Vanguard FTSE Europe ETF (VGK)
Expense Ratio: 0.08% Europe is home to many great companies in a wide range of industries — from technology and banks to defense and consumer product firms. And a great way to gain exposure to a cross section of European companies is through the Vanguard FTSE Europe ETF. This ETF tracks the performance of the FTSE Developed Europe All Cap Index. The nice thing about this ETF is it includes a basket of stocks from all major markets in Europe — Austria, France, Germany, Ireland, Italy, the Netherlands Switzerland and the United Kingdom, among other countries. The companies held in the Vanguard FTSE Europe ETF include Nestle, SAP and Royal Dutch Shell, to name only a couple. The reassuring thing about European companies and markets is that they are more established and stable than in many other parts of the world. Another benefit of the VGK ETF is that Vanguard charges some of the lowest fees in the industry for its products. The expense ratio for this ETF is just 0.08% and it pays a quarterly dividend. In terms of performance, Vanguard’s FTSE Europe ETF is up 6% year-to-date and also up 6% after 10 years.
Schwab Emerging Markets Equity ETF (SCHE)
Expense Ratio: 0.11% Emerging markets can be volatile and risky, but they can also be lucrative. The Schwab Emerging Markets Equity ETF has $6 billion under management and invests in 20 emerging market countries, including China, India, Brazil, Malaysia and Mexico. The fund is tilted towards Chinese financials, but is still quite diversified with about 1,500 total components included within the ETF, including utilities, healthcare, real estate and energy. Top stock holdings include TaiwanSemiconductor, JD.com and Ping An Insurance. The expense ratio for the SCHE ETF is 0.11%, and it too pays a dividend every six months in December and June. The ETF has a one year annualized return of 12.77%, 8.24% after five years and 3.57% after 10 years. As mentioned, emerging markets can be volatile and are best suited to investors who have a healthy appetite for risk. However, a balanced ETF such as SCHE can provide great diversification and global exposure to offset U.S.-based investments.
ProShares Ultra MSCI Brazil Capped (UBR)
Expense Ratio: 0.95% Investing in Brazil is not for everyone. The country’s economy has been in a depression since 2014, the result of falling commodity prices and the country’s inability to carry out necessary fiscal reforms. However, Brazil continues to have the largest economy in Latin America, and while investors may not want to put their money into individual Brazilian companies, the ProShares Ultra MSCI Brazil Capped ETF provides some nice exposure to the country of 210 million people.
UBR is what’s known as a leveraged ETF, meaning it may borrow money to buy securities. The fund seeks to achieve two times the return of the MSCI Brazil 25/50 stock index. The leveraged approach adds some additional risks for investors.
However, investors who can tolerate the risk and have a long time horizon may find the ends justify the means with this ETF. In 2017, this ETF returned 35.36%. While it won’t posts returns like that every year, it demonstrates the potential upside that can be found in emerging countries such as Brazil. The ETF’s share price has been hammered this year, but it has nearly doubled from its March low and now trades at just over $20 per share.
Global X FTSE Nordic Region ETF (GXF)
Expense Ratio: 0.56% The Nordic region of Europe, which is comprised of the countries Finland, Sweden, Norway, Denmark and Iceland, is a hotbed of technology and innovation. And a smart way to get in on the action is to buy into the Nordic region through the Global X FTSE Nordic Region ETF. This fund invests in companies such as telecom Ericsson, automaker Volvo and international engineering company Kone. Of all the ETFs on this list, GXF is the top performer, up 25.92% in the last year and 132.12% since it was founded in 2009 in the aftermath of the Great Recession. All of the companies included in this ETF are safe and reliable with a solid track record of earnings, and most of them are global leaders in their respective markets. Of all the countries in Europe, the ones that comprise the continent’s northern Nordic region tend to be the most innovative and outward looking. The countries that gave the world everything from Lego (Denmark) to ABBA (Sweden) are among the top spenders on research and development in the world. Sweden and Finland each spend more than 3% of their gross domestic product (GDP) on research and development, outpacing the rest of Europe. Investors who are keen on innovation, technology and growth may want to look to the Nordic area of Europe and to this well diversified ETF that has delivered big returns over the past decade.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
More From InvestorPlace
6/6 SLIDES
If REGN stock closes below the 50-day moving average, look for a retest of the 10-day moving average and/or the $575 mark. Below $575 would not be very promising. It would put the September lows back in play around $540, as well as the 200-day moving average.
On the upside, however, let’s see if Regeneron can clear Monday’s high near $620 and push back up toward 2020 resistance near $650 to $660. Above the current high could put $697 in play, which is the 123.6% extension from the recent low to the July high.
Top Stock Trades for Tomorrow No. 3: Aphria (APHA)
Cannabis stocks caught a bid on Monday, with Aphria (NASDAQ:APHA) ripping more than 14% on the day.
Notice the relevance of the of the 200-day moving average so far this year. This mark recently held as support, propelling Aphria higher on Monday. Shares reclaimed the 50-day moving average in the process.
If it can clear $5, let’s see if this name can get some pre-earnings momentum working in its favor. I would love for another push up toward $6, which has been stiff resistance so far this year. That’s with and without the novel coronavirus playing a role, by the way.
On the downside, a break of the 200-day moving average is a concern.
Top Stock Trades for Tomorrow No. 4: Tilray (TLRY)
Of the two cannabis stocks here, Tilray (NASDAQ:TLRY) is the lower quality play in my view. However, that’s not stopping the stock from having its own notable rally.
Shares are reclaiming the 10-day moving average on the move, a level of resistance for the last two months.
If Tilray stock can squeeze higher, look for a possible move up toward the 50-day moving average and downtrend resistance (blue line). Above that puts $7 back on the table, followed by a potential test of the 200-day moving average.
On the downside, though, look for a retest of the 10-day moving average. Below puts the September low in play at $4.41, followed by the key $3.75 level.
On the date of publication, Bret Kenwell held a long position in APHA.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
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