“However, after a January that saw FDN rally 13.42% — good enough for its fourth-largest monthly gain of the last decade — and a three-year streak of extraordinarily mild monthly February moves in the range of 1% apiece, it’s fair to ask whether the internet-stacked fund (which counts Amazon, Facebook, Netflix, Salesforce, Google, and PayPal as its top holdings) has enough rally fuel in the tank to manage a decent rally by month’s end,” according to Schaeffer’s.
Some technical indicators could provide clues regarding FDN’s ability to live up to its February reputation and build on its impressive January showing.
“Consider that perhaps some of these fleeing traders are technicians keying on FDN’s 200-day moving average, which is currently in position to exert pressure on the shares. This benchmark trendline marked the Oct. 8 low, but was breached — and then emerged as resistance on a re-test — very shortly thereafter. The 200-day moving average is currently at $132.40, in the same price zone that marked the ETF’s intraday high in March 2018, as well as a 10% correction from that July closing high,” notes Schaeffer’s.
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