HOLDRS

These "mutual funds" or ETF's invented by Merrill Lynch are useful for determining investment vs trading targets over the next whenever. HOLDR stands for Holding Company Depositary Receipts and each fund contains the big movers in that particular sector.

Remember a couple of weeks ago I said to keep an eye on the oil industry? Well here is the current weekly chart of the Oil Industry HOLDR (OIH).



You can see that oil is bouncing off the 90 period EMA even now and that, based on the past performance, seems to be a good thing.

Then some time ago I compared hardware to software in the computer industry and used the SMH/SWH as the basis - take a look now. First SMH -



And then SWH -



I think looking at these two shows that software is a bit overbought perhaps and the hardware sector might be looking for a bid.

The point being that you can use the HOLDRS to inform your investing. Set up a watch list and look at them once a week or so. I know one thing - I think if I were holding software I'd be looking for a place to exit and if I was thinking about buying some hardware I might proceed with the purchase - stocks that is.

If you are really interested in HOLDRS go to the AMEX site (amex.com) and click on HOLDRS in the left window. That will give you a list of them. You can then review them individually.