Trade of the Day: Bottom Fishers Should Hook This Energy Fund

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iShares US Oil & Gas Exploration & Production(IEO) — This ETF seeks to track the investment results of an index composed of U.S. equities in the oil and gas exploration and production sector. It was hammered to lows not seen in over a year as oil prices plunged in recent months. But this is a Morningstar five-star rated fund that holds some of the most well-known and financially solid companies in the industry.

These include ConocoPhillips (COP), EOG Resources (EOG), Anadarko Petroleum (APC), Phillips 66 (PSX), Apache (APA), Pioneer Natural Resources (PXD), Devon Energy (DVN), Marathon Oil (MRO), Noble Energy (NBL) and Valero Energy (VLO).

It has a low expense ratio of 0.43%, which is more than offset by its 1% yield.

IEO is off more than 20% from its all-time high just below $100, which was made in June. It broke down through its 200-day moving average at $88 in late September, but it held at its long-term bullish support line and recently flashed a buy signal from the MACD indicator. It is still in a bull market. Also note last week’s high level of buying and what could be a selling climax on Thursday.

IEO is a speculative trade at this time, but bottom fishers could profit while others miss the boat. The trading target is $90, and long-term investors could be rewarded with a much higher return.

IEO Chart
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This ETF is a non-diversified fund and should be included with other investments in order to achieve a balanced portfolio.


Article printed from InvestorPlace Media, https://investorplace.com/2014/10/trade-day-ishares-us-oil-gas-exploration-production-ieo/.

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