Welcome to Extreme Investor Network, where we provide you with unique and valuable insights into the world of investing. Today, we are diving into a chart analysis of the Invesco MSCI Global Timber ETF (CUT) that suggests the fund could be on the verge of a big rally.
According to Wolfe Research analyst Rob Ginsberg, CUT has carved out a compelling multi-year base and is close to breaking out above $34. This level has acted as resistance for the past two years, but the fund has traded above $34 multiple times this year, showing signs of potential strength. With holdings in companies that focus on paper and packaging, such as Smurfit WestRock and International Paper, CUT is positioned to benefit from the market’s rotation towards raw material producers.
Despite its relatively small size with about $55 million in assets, CUT has the potential for growth as it continues to flirt with the breakout level. The fund comes with an expense ratio of 0.67%, making it an attractive option for investors looking to capitalize on the materials market.
The broader market trend has shown favorable conditions for raw material producers, with the iShares U.S. Basic Materials ETF (IYM) up 0.7% in July. This positive momentum, combined with the technical analysis of CUT, sets the stage for a potential rally in the near future.
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