Since the Bear Stearns (BSC) collapse earlier this year, the broker-dealer exchange traded fund (ETF) has been getting kicked up and down.
Year-to-date, the iShares Dow Jones US Broker-Dealers (IAI) is down 23.6%. It’s been trying to make a comeback, though: since hitting its 52-week low on March 17, it’s up 14.1%. However, it’s got a ways to go, as it’s sitting 14.5% below its 200-day moving average.
The struggles of the financial sector are not exactly a surprise, since much of this year has been full of news of analyst downgrades and massive writedowns. Billy Fisher for The Street says that investment banks still have some mountains to climb before the stock prices will recover.
Long-term, some analysts think that while there’s still growth potential in the sector once it turns around, there’s still going to be some near-term volatility. While this sector continues to iron out the kinks and find its footing, wait it out until the fund crosses its trend line. If you’re really itching to get in, using the 50-day moving average as your entry/exit point is a short-term option you have.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.