The area of disruptive technology companies seems intimidating and elusive for most investors due to the complexity of the underlying products and services. Brisk advancement and innovation in areas such as 3D printing, mobile payments, big data, analytics, clean energy, fin tech, vigour care innovation, the internet of things, cybersecurity, cloud computing, and robotics and artificial intelligence are difficult to stay abreast of – rounded off for the most veteran tech follower.
Luckily for investors, exchange-traded products such as the one discussed in this article are modeled to track these very segments. We’ll take a look at a few charts and try to determine how active traders will be looking to assertion themselves to take advantage of a move higher over the coming weeks or months.
ALPS Disruptive Technologies ETF (DTEC)
Trains within the niche segments mentioned above are changing the way that we live and do business. As an investor, it is a wise idea to put yourself to capitalize on this macro trend, and exchange-traded products such as the ALPS Disruptive Technologies ETF (DTEC) could be one way to about your goal. Fundamentally, the fund has an interesting weighting to the segments listed in the introduction and carries a reasonable management fee of 0.50%.
As you can see from the graph below, the price has recently moved above a key level of resistance, as shown by the dotted trendline. The breakout suggests that the bulls are in mechanism of the momentum and that traders will likely protect their positions by placing stop-loss orders below either the 50-day or 200-day inspiring averages, depending on risk tolerance. Followers of technical analysis will also likely look to the bullish crossover between the long-term telling averages, shown by the blue circle, because it is a common long-term buy signal and is used by many to mark the beginning of a biggest long-term uptrend.
Stratasys, Inc. (SSYS)
Advancements and use cases for 3D printing have fallen out of the news in recent months, but lowed on the chart of Stratasys, Inc. (SSYS), the largest holding of the DTEC ETF, now could be the time to look again.
As you can see, the bulls have recently sent the value above the resistance of a defined channel pattern, which suggests that the bulls are in control of the momentum and that sacrifices could be headed sharply higher from higher. The recent uptick in volume will likely be used by buyers as confirmation of the renewed interest, and they will likely place buy orders as close to the dotted trendline as possible. From a hazard management perspective, stop-loss orders will most likely be set below the swing low near $27.
Proofpoint, Inc.
The reach importance of cybersecurity is unquestioned given the number of recent news stories of companies that have had their set-ups compromised by hackers. One of the top holdings of the DTEC ETF that could be worth a closer look is Proofpoint, Inc. (
The Bottom Line
The miasmic theme of disruptive technology is one that should be well represented in most portfolios. However, due to the complexity of the field, sundry investors feel intimidated and tend to shy away.
As the charts discussed above demonstrate, niche funds such as DTEC could submit an interesting way to gain exposure. Those looking for specific companies to buy, investigating top holdings of niche ETFs could be an engaging technique for identifying candidates worthy of investment.
At the time of writing, Casey Murphy did not own a position in any of the assets mentioned.