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Mid-Cap ETF Opportunity


Several mid-cap exchange traded funds joined the new all-time club on Wednesday adding to what has been a solid run for the often overlooked group.

The $15.1 billion SPDR S&P MidCap 400 ETF (MDY) , which tracks the S&P MidCap 400 Index, was not one of the mid-cap funds hitting a new high Wednesday, but MDY is up 2.1% in the past month and now resides just 0.6% below its 52-week high.

At least one technician sees the possibility of more upside for the behemoth mid-cap ETF.

“Drilling down to the weekly chart time frame, we see the price action climbing above the $250 resistance level and the downtrend line last week. The price action is holding above $250, with the 50-day MA beginning to turn up,” says Deron Wagner of Morpheus Group of MDY.

Critical to MDY’s near-term fortunes will be the ETF’s ability to find support at its 10-day moving average in the event of any pullbacks.

“The daily chart shows the tight price action, with the past several sessions above the rising 10-day MA. Note that the 20-day EMA has crossed above the 50-day MA, and the 50-day MA is flattening out,” added Wagner. “We look for MDY to hold support at the rising 10-day MA and push to new highs.

MDY, which debuted in 1995, charges 0.25% per year. No stock accounts for more than 0.72% of the ETF’s weight. The fund’s largest sector weight is 23.1% to financials followed by 17% to industrials. Technology and consumer discretionary names combine for 28%. [Mid-Cap ETFs Outperforming]

Risk-tolerant investors looking to capture out-sized mid-cap gains can consider the Ultra MidCap400 ProShares (MVV) , which attempts to deliver twice the daily returns of the S&P MidCap400 Index. MVV is up 7.5% year-to-date, which is less than double the 4.3% gain for MDY.

SPDR S&P MidCap 400 ETF



ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.