(FXN) First Trust Energy AlphaDEX - Ratings and Ratios

The First Trust Energy AlphaDEX Fund (FXN) is an actively managed ETF that focuses on the energy sector, employing a rules-based, quantitative methodology to select stocks from the Russell 1000 Index that are likely to outperform traditional energy indices. By investing at least 90% of its net assets in the securities comprising the AlphaDEX index, FXN aims to capitalize on the potential alpha generated by its constituent stocks.

The AlphaDEX selection methodology is designed to objectively identify energy stocks with high potential for outperformance. This approach is grounded in a multifactor model that evaluates stocks based on various fundamental and quantitative metrics, allowing the fund to tilt towards stocks with favorable characteristics. As a result, FXNs portfolio is likely to be comprised of energy companies with robust financials, competitive positioning, and growth prospects.

From a technical analysis perspective, FXNs price action indicates a potential bullish reversal. With a current price of $14.63, the ETF is trading above its 20-day simple moving average (SMA) of $14.12, suggesting a short-term uptrend. The 50-day SMA at $14.99 is also within striking distance, and a break above this level could pave the way for further gains. However, the 200-day SMA at $16.28 remains a significant resistance level, and the fund would need to demonstrate sustained buying pressure to overcome this hurdle.

Considering the fundamental data, FXNs assets under management (AUM) stand at $266.28 million, indicating a relatively stable and liquid ETF. The energy sectors overall performance and FXNs constituent stocks will be crucial in determining the funds future trajectory. Given the current technical and fundamental landscape, a potential forecast for FXN is a gradual appreciation towards the 50-day SMA, followed by a possible breakout above $16.28 if the energy sector experiences a sustained rally. Conversely, a decline below the 20-day SMA could signal a return to the 52-week low of $12.88.

To capitalize on potential opportunities or mitigate risks, investors may consider monitoring FXNs price action relative to its SMAs, as well as developments in the energy sector that could impact the funds constituent stocks. A thorough analysis of the funds holdings, sector allocation, and overall market conditions will be essential in making informed investment decisions.