These are some of the more liquid ETF's available to trade. I ranked them based on relative strength to SPY using the 60 day lookback period. That's the leading edge of our "sweet spot". As we see rotation rank improve into the the 60 to 120 day time frame, with moving average relationships bullish and RSI readings above 60, we have the perfect backdrop to check Chaikin Analytics for Very Bullish stocks exhibiting the usual Chaikin characteristics for a bullish trade. Look at the ETF IYR, for example - a text book intermediate rotation ETF. Over the past 160 days, it's moved from 27th ranked to 9th ranked, edging into the top half of the rankings in the 60 day column and maintaining bullish rankings even into the shortest time frames. Notice the short, medium and longer term moving average relationships are all bullish and the RSI is at a bullish 67.22. W
As an ETF making its way from the depths of the relative strength comparison rankings, IYR is is currently overbought but right at the earliest stage of a possible bullish personality change. IYR's ratio of bullish to bearish rated underlying stocks is 10:1. Money flow and 6 month relative strength have peeped above neutral, but with the ETF Power Gauge remaining yellow. At the close of this week's trading, Chaikin Analytics indicated a relative strength "buy" signal, one that plays out over a 3 month timeframe. Some traders with extended time-frames don't worry about the high position of the OB/OS oscillator, but position size defensively since intermediate support is under $84 dollars and the stock is trading at well above $90. Others will let the oscillator roll lower to either oversold or to a point in the chart where its downward direction reverses and rolls up. That reversal is the entry day. Others, may put half a position on at this level and be prepared to complete the trade and become fully invested when the stock OB/OS oscillator moves to oversold then reverses. My preferred strategy is to sell a front month 40 delta OTM call and buy a 7o delta long dated deep in the money call as a surrogate stock replacement. If the osciallator and stock roll down appreciably, i'll buy back the short call for a 70% ish gain and then ride the in the money call naked back up to overbought, where I'd considering rolling back into a covered position. It's a trade the requires rules and patience.
Other traders will keep a watch list of Very Bullish rated stocks held by the ETF and attempt to realize better than the average gains reflected in an ETF stock basket. IYR constituent CBRE is on the verge of breaking out above $80 and carries a Very Bullish rating. The stock is uptrending in both short and long term. Money flow has blipped positive, while relative strength like its parent ETF has been persistently bullish. Earning are on April 29th, and any trader hoping to capture outsized gains has to be prepared for the risk of holding a single company stock through an earnings announcement..
That's where the Chaikin OptionsPlay spread evaluation model can come on handy. It will objectively rate various risk defined long options strategies (among other income strategies as well) such as a long call vertical, where the risk of disaster is mitigated should the company miss earnings expectations and sell off. In this case, the long naked call and long call vertical strategy ratings appear to be sub par. So after consider a number of different ways to play the sweet spot IYR, long stock of the ETF would likely be my preferred way of trend trading my way through earnings seasons.