Innovative technologies are transforming the way we, humans, to live and work. The companies that specialize in the types of products of the transformation of the global economy are the focus of long-term investors and active traders alike. As you’ll see in the graphs below, now may be the perfect time to increase exposure to this request, the segment of the market.
SPDR Kensho New Economies Composite ETF (KOMP)
Investors who are more interested in adding exposure to innovative companies are often careful to examine the top holdings of exchange-traded products like the SPDR Kensho New Economies Composite ETF (KOMP). For those who don’t know, the managers of the fund seek to take advantage of artificial intelligence and quantitative weighting for the tracking of an index of companies that exploit the exponential processing power, robotics, artificial intelligence, and automation.
As you can see below, the price of the fund has recently exceeded the combined resistance of the 200-day moving average and the most influential, trend curves. These levels are most likely to be used by followers of the technical analysis as guides to buy and place stop orders. More specifically, at current levels, the momentum is clearly in control of the bulls, and most traders will probably protect against a sudden change in sentiment by placing stop-loss orders below $33.79.
iRhythm Technologies, Inc. (CRTI)
A method for finding innovative businesses who could be taken advantage of by the traders is to explore the major Etfs such as KOMP. For example, taking a look at the map of iRhythm Technologies, Inc. (CRTI), you can see that the share price has been trading in a period of consolidation, during most of the last 12 months.
However, from 2020 onwards, you can see that the price has started to make a move higher. The rising moving averages, which was initiated by a bullish crossover in January, is a sign to many traders that the long-term, the uptrend is in the early stages. From a risk management perspective, stop-loss orders will probably be placed below $109.91 $or 84.08, depending on the risk tolerance and investment horizon.
Masimo Corporation (MASI)
For followers of technical analysis, another medical device company innovative and top-of-the holding of the KOMP ETF could be interesting to take a closer look, is Masimo Corporation (MASI). As you can see on the chart, the bulls have been in control of the momentum since last summer.
Traders will likely want to find how the sales in March sent prices toward the long-term support of the 200-day moving average and how it was quickly met by the increase in the buying pressure. The impressive rebound in the long term, the levels of support was enough confirmation for bulls to reaffirm the strength of the uptrend underlying. Based on this model, uptrend, traders will be more likely to look to add to their positions on the short-term, plot twists, such as the recent move to the support of the 50-day moving average.
The Bottom Line
Innovative companies are transforming the world in which we live, as illustrated by the strong performance of funds such as the SPDR Kensho New Economies Composite ETF. It is interesting to note how the medical device companies have recently started to move their way into the top holdings, and as shown on the graphs discussed above, it seems that we could be in the early stages of a large movement to the upside.
At the time of writing, Casey Murphy did not own a position in any of the assets mentioned.