PowerShares S&P SllCp Egy Pflio (NASDAQ:PSCE) — This exchange-traded fund, as its name implies, focuses primarily on stocks of the S&P SmallCap 600 Capped Energy Index. The stocks in the index are engaged in the production, distribution or servicing energy-related products. It includes oilfield service, pipeline construction and oil and gas exploration both on- and off-shore.
The firms included in the index are primarily U.S.-based, but some have operations in Canada, Mexico, and South America. Generally the companies in this ETF are not as subject to foreign tax problems and currency issues as the big-cap names like Exxon Mobil Corporation (NYSE:XOM) and the other holdings of the Energy Select Sector SPDR (ETF) (NYSEARCA:XLE). However, the holdings are undoubtedly more subject to financial risk due to the wide price fluctuations of crude oil and crude oil futures.
Nevertheless, PSCE stock is one of the leading performers of all ETFs this year with a market return of over 30% through the end of November. It has a low net expense ratio of 0.29%. Its top-ten holdings are listed on U.S. stock exchanges.
Technically PSCE is in a powerful bull market that began in January 2016 at a low of under $11 per share. A CBR reversal from my internal proprietary indicator marks the low.
Until recently PSCE traded within a narrow bull channel with a spread of about $4 from its bullish support to its resistance line. On Nov. 30 it broke above the resistance line at $20 jumping to over $22.50 in an exponential breakout. That break formed the stem of a flag that will most likely break prices higher.
A purchase of PSCE below $21 could provide a trade to $25 for a return of 19%.