Discretionary ETFs Still Face Technical Hurdles

“From a relative strength perspective, I believe that it is important to monitor the Jun-Jul 2014 lows as a violation of this support may indicate that its time to become a bit more defensive,” notes the analyst.

VCR is sporting a modest year-to-date gain, but the fund is off 1% in the past month, a disappointing performance given the strength in media stocks. VCR features Walt Disney (NYSE: DIS), Twenty-First Century Fox (NasdaqGS: FOXA) and Time Warner (NYSE: TWX) among its top-10 holdings. Those stocks combined for 9.9% of the ETF’s weight at the end of the second quarter. [Tune Into the Media ETF]

Like XLY, VCR has been hindered by some other familiar names. Shares of McDonald’s (NYSE: MCD) are off 6.7% in the past month while Amazon (NasdaqGS: AMZN) has tumbled 8%, extending its 2014 decline to 20%. McDonald’s and Amazon combine for 8.2% of VCR’s weight.

ETF Trends editorial team contributed to this article. Tom Lydon’s clients own shares of EEM.