U.S. Metals & Mining : A more favourable conjuncture? (XME) – 12/07/17

We integrate the ETF SPDR Metals & Mining (XME), which is technically attractive, but also fundamentally, which is  due to the anticipated return of inflation on the world stage and better quality growth in China. XME expenses are 0.35%, with a liquidity of $ 543m. The replicated index (S&P Metals & Mining) includes 29 stocks including Alcoa, Cliffs Natural Resources and Steel Dynamics. The materials split is made of Steel (50%) followed by aluminum (11.8%), gold (11.6%), coal (9%), silver (7.7%) and copper %).

The weekly chart shows a positive development which could quickly result in a bullish combination of the moving averages 13 & 26 and a bullish reversal of the MACD. If this were to be confirmed, the combination of these two signals would make the medium trend bullish. The rounded bottom structure, which builds on the M100 is also encouraging.

XME : weekly data

Les graphiques à long terme donnent également des signaux intéressants. Les moyennes 13x26 se sont croisées à la hausse tandis que le MACD est en train de passer la ligne de zéro, ce qui implique que la tendance à long terme est de nouveau positive, ce qui n’était pas le cas depuis le milieu de l’année 2011. Le prochain objectif est de retrouver (et dépasser) le sommet de début d’année autour des 35$.

XME : monthly data