(FMAY) First Trust Exchange-Traded - Ratings and Ratios

The First Trust Exchange-Traded Fund VIII - FT Cboe Vest U.S. Equity Buffer ETF - May (BATS:FMAY) is an actively managed exchange-traded fund that employs a hedging strategy to provide investors with a buffer against potential losses in the underlying asset, while still allowing for potential gains. The fund achieves this by investing in FLexible EXchange Options (FLEX Options) that reference the SPDR S&P 500 ETF Trust.

Under normal market conditions, FMAY will allocate a significant portion of its assets to these FLEX Options, which are designed to offer a level of protection against downside risk. This strategy is particularly appealing to risk-averse investors seeking to mitigate potential losses in their portfolios. As a non-diversified fund, FMAYs investment strategy is focused on this specific hedging approach, rather than spreading investments across a broad range of assets.

From a technical analysis perspective, the current price of FMAY is $48.86, with its 20-day simple moving average (SMA) at $48.75, indicating a slight bullish trend. The 50-day and 200-day SMAs are at $47.13 and $47.10, respectively, suggesting a longer-term uptrend. The average true range (ATR) is 0.41, representing a daily price volatility of 0.83%. Given these technical indicators, it is likely that FMAY will continue to trade within a narrow range in the short term, with a potential breakout above its 52-week high of $49.23.

Fundamentally, FMAY has $919 million in assets under management (AUM), indicating a moderate level of investor interest. As the S&P 500 continues to be a closely watched benchmark for the US equity market, FMAYs hedging strategy is likely to remain relevant. Assuming the S&P 500 continues to experience moderate volatility, FMAYs FLEX Options strategy is likely to provide a level of protection for investors, making it an attractive option for those seeking to manage risk.

Based on the technical and fundamental data, our forecast is that FMAY will continue to trade within a narrow range, with a potential target price of $50.50 in the next 6-12 months, assuming the S&P 500 continues to experience moderate volatility. However, if the S&P 500 were to experience a significant downturn, FMAYs hedging strategy is likely to provide a level of protection, limiting potential losses. Conversely, if the S&P 500 were to experience a significant upswing, FMAYs potential gains may be capped due to its hedging strategy.