The Health Care Select Sector SPDR (NYSEArca: XLV) and the Guggenheim China Small-Cap ETF (NYSEArca: HAO) have been leaders in their respective market niches this year. With a year-to-date gain of 28.7%, XLV is the best performer among the nine sector SPDR ETFs.
HAO’s out-performance of large-cap China ETFs is almost staggering. Year-to-date, the iShares China Large-Cap ETF (NYSEArca: FXI) is off 4.6%, implying a glum year for China ETFs. HAO has managed to gain 6.3% despite a generally trying environment for emerging markets ETFs. [China Small-Cap ETF Keeps Shining]
A look at HAO and XLV’s charts show more gains could be on the way for the two ETFs. HAO “bounced higher from a double bottom pattern, with a slight “undercut” of the prior low on the weekly chart below. Last Friday, HAO cleared the highs of a three-week range on better than average volume, signaling the uptrend may be ready to resume after a nine-month long consolidation,” said Deron Wagner of Morpheus Trading Group.
Regarding XLV, Wagner said the ETF “is poised to attack the prior swing high, with a close above last week’s high. The recent pullback in $XLV was the shortest corrective wave over the past few months, coming in at less than 3.5% off the swing high. The pullbacks in August and June were about 5.5% and 8% respectively.”