For those looking for short exposure or hedges to a portfolio of longs, here are a few of the sector ETFs that stand out as short-side swing trading opportunities. While I may add some of these as official trade ideas, I don’t have the time to annotate all the charts & list suggested stops & profit targets right now so I figured that I’d pass these ideas along as unofficial trade ideas at this time for those interested. As usual, my preferences is to short the 3x leveraged version of a sector ETF that I expect to hold for more than a day or so. However, I realized that some don’t have access or the ability to short the leveraged ETFs, in which case a few alternatives, both long AND short, are listed behind my preferred shorting proxy.
Obviously, for the long versions, you would need to go short (sell short) vs. long (buy). Make sure to adjust your position size according to the volatility of each sector as well as to account for the use of leverage on any of these ETFs. Let me know if you have any questions. The listing of long & short ETFs for each sector below is not comprehensive. Check out the ETF Center located under Resources on the main menu of the site or do a web search for alternative options. Also factor in any sector or position overlap with ETFs such as QQQ, XLK & IBB/XBI (the Nasdaq 100 is very tech & somewhat biotech heavy) or XBI & XLV (biotech & healthcare, lots of overlapping co’s); XLE & XOP, etc..
- Biotechs: LABU/XBI
- Energy: ERX/XLE/DUG
- Oil & Gas Expl./Prod.: GUSH/XOP
- Small Caps: TNA/IWM/TWM/RWM
- Nasdaq 100: TQQQ/QQQ/QID/PSQ
- Basic Materials: SMN(2x short)/XLB
- Healthcare: CURE/XLV
- Technology: TECL/XLK