Key Chart: iShare US Broker-Dealer and Securities Exchanges (IAI) - Chaikin Analytics
iShare US Broker-Dealer and Securities Exchanges (IAI)

Key Chart: iShare US Broker-Dealer and Securities Exchanges (IAI)

IAI stayed as a Very Bullish Chaikin Power Gauge ETF Rating for several weeks. The fund rapidly moved from an oversold condition to a middle spot in the OB / OS range and is heading toward OB but not quite there yet as it rides along the 21-day line in the middle of the volatility bands.   

This group has several components that are reporting this week two of which, Morgan Stanley (MS) and Goldman Sachs (GS), represent close to 40% of this fund. This could be a fund to use if you do not want to take individual stock risk. Also, both companies had relative strength signal on Friday and their estimates have been increased as well: 

Stock Inside the IAI ETF: Virtu Financial, INC. (VIRT)

Using the IAI as a hunting ground, I located VIRT. This company, in short, provides execution services to the broker-dealer and investment management industry. They benefit from the high-frequency trading that has been occurring in the recent weeks, and months. So this is a bit of a “picks and shovels” play to use a pun. The checklist is nicely set up with the exception of the OB/OS indicator not being in the oversold position. But using a “weight of the evidence” approach there are several factors that potentially outweigh that one exception. First off estimates have been revised upward at several firms. There has been insider buying as our factor in that area reads Bullish. The stock is relatively valued on a price to sales basis. And there has been a rise of over 70% in the past year of trading. That said, you can still be patient and wait for the move to oversold, and always manage your risk. Near-term support is in the $29 area and firmer support between $26-$28 in the area of the long-term support trend line.  

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