AeroSpace ETF Shoots for the Stars

Last Friday, we looked at a Daily Price chart of Builders FirstSource, Inc., and noted that the stock was in a clear bullish trend.

Today’s Chart of the Day is a 10-Month Simple Moving Average chart for SPDR S&P Aerospace & Defense ETF (NYSE: XAR).

XAR seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Aerospace & Defense Select Industry Index by using a sampling strategy.

Now, below is a 10-Month Simple Moving Average chart for XAR.

Back in January, the XAR 1-Month Moving Average crossed above the 10-Month SMA indicating XAR was on a PowerTrend ‘buy’ signal.

Chart of the day

And immediately after the ‘buy’ signal occurred…

Prices began to climb, and haven’t stopped yet.

If you had purchased XAR shares when the PowerTrend ‘buy’ signal occurred for the stock back in January, when the stock was around $89.51, you’d be up 23.9% by now.

Not bad, for a less-than-a-year- hold of a major Defense Sector ETF.

Now, as you can see, the 1-Month Moving Average is still above the 10-Month SMA. That means the bullish trend is still in play!

As long as the 1-Month price remains about the 10-Month SMA, the stock is more likely to keep trading at new highs in the coming days and weeks.

We’ll be keeping our eye on this stock as it continues to trend upward so we’ll know the moment the market conditions shift and the stock begins to come back down.

Additionally… we’d like to touch on how a previous Chart of the Day stock has done.

On November 8th, we highlighted iShares U.S. Home Construction ETF (NYSE: ITB), nothing that the stock had pulled back below the Upper Keltner Channel, presenting a buying opportunity.

If you happened to have purchased ITB shares on that day, you’d already be up 3.5%.

But… if you had purchased the right option contract, you would be up 41.5% in less than three weeks’ time!

That’s the power of options. You may have noticed that Chart of the Day doesn’t recommend specific options plays…

That’s what the PowerTrend Options service does. If you haven’t read about it yet, you can click here to check it out.

Best Regards,

Chuck Hughes
Editor, Chart Of The Day

Chuck Hughes

Written By Chuck Hughes

Before Chuck Hughes won 10 Trading Championships, he was an accomplished Air Force pilot. In fact, he credits his success as a stock and options trader to his disciplined upbringing and career. When he was deciding between a career in the Navy and a career in the Air Force, the Navy told him he’d only have a 33% chance of flying jets. The Air Force gave him 100%. He liked those odds better. 35 years ago, Chuck had a wife, a young daughter, a son on the way, and a huge mortgage to afford. He didn’t want to give up on his lifelong dream and stop flying for a major commercial airline. He knew he needed to supplement his income during the 15 days a month he wasn’t flying. So he used his experience in discipline and math, and his understanding of finance and the stock markets (which he’d always been interested in,) and opened a $4,600 trading account. He made over $460,000 in profits his first two years of trading, and he hasn’t looked back since. When he was diagnosed with Meniere’s disease 15 years later, which commonly leads to vertigo…He knew his career as a pilot wouldn’t last much longer with those odds. But he didn’t have to scurry to find another gig, or panic about how his family would eat… He’d spent the last 15 years perfecting his system and raking in cash. As an options trader, Chuck does not let his emotions get in the way of his trading strategy. He adheres to disciplined and methodical options and stock trades. Because he respects the options game so highly, and understands the true freedom that financial solvency can bring, Chuck was able to design and refine his system and win those 10 Trading Championships. Put simply, Chuck Hughes’ trading strategies work, and in all types of market conditions. They’ve worked throughout the bull, bear, and flat markets America has seen in the last 30 years. Chuck Hughes has spent that time building a reputation as one of the most trustworthy options traders in the industry. His publishing group Legacy Publishing LLC was one of the few trading groups on the planet to have correctly predicted and profited from the 2008 financial crash .As a published author 16 times over, a 10-time Trading Championship winner, and an options-trading teacher for 25 years, he’s learned to trade and teach without an ego.