iShares Dow Jones US Technology (ETF) (IYW) — This ETF tracks the investment results of the Dow Jones U.S. Technology Index. The index may include companies of any market capitalization, but it is currently heavily weighted toward mega- and large-cap tech stocks.
The top 10 holdings in IYW are Apple Inc. (AAPL), Microsoft Corporation (MSFT), Facebook Inc (FB), Intel Corporation (INTC), Google Inc (GOOGL), International Business Machines Corp. (IBM), Google Inc (GOOG), Cisco Systems, Inc. (CSCO), Oracle Corporation (ORCL) and Qualcomm, Inc. (QCOM).
IYW has a relatively low expense ratio of 0.45% per year and a current yield of 1.1%. Year to date, shares are up 4%, and they show a 12-month return of 14.2%.
The fund is ranked “overweight” by Capital IQ, which notes that IYW is currently trading at a small 0.01% premium to its net asset value (NAV).
IYW is in a powerful, well-defined bull channel that began in April 2013 at about $70. Initial support is at the 50-day moving average at $108.44, followed by the bull channel support line at about $107, and then the 200-day moving average at $104.68. Resistance to rallies is first at a short-term resistance line at $111.50, and then the channel’s resistance line near $117.
MACD is very close to issuing a fresh buy signal. Recent volume has been flat, but for the past six weeks there has been steady on-balance buying.
Buy IYW for a four-month trade to $118 for a return of 9%. Investors should consider buying this ETF as a long-term position with an eventual target of $120-plus.
