(FXZ) First Trust Materials - Ratings and Ratios

The First Trust Materials AlphaDEX Fund (FXZ) is an actively managed ETF that focuses on the materials and processing sector, aiming to outperform traditional passive indices through its AlphaDEX selection methodology. By investing at least 90% of its net assets in the securities that comprise its underlying index, the fund seeks to capitalize on the potential for positive alpha generation.

The AlphaDEX methodology employed by FXZ involves a rules-based approach to stock selection, prioritizing companies with characteristics that are likely to drive outperformance. This process is designed to objectively identify stocks within the Russell 1000 Index that exhibit favorable attributes, such as growth, value, and momentum, ultimately creating a modified equal-dollar weighted index.

From a technical analysis perspective, FXZ has demonstrated a recent uptrend, with its last price of $54.99 exceeding both its 20-day and 50-day simple moving averages (SMA) of $52.54 and $53.74, respectively. However, the funds current price remains below its 200-day SMA of $60.08, indicating a longer-term downtrend. The average true range (ATR) of 1.64, representing a 2.98% daily volatility, suggests moderate price fluctuations.

Considering the current technical and fundamental data, a forecast for FXZ can be constructed. With the materials and processing sector poised for potential growth, driven by increasing demand for raw materials and infrastructure development, FXZ is well-positioned to capitalize on this trend. Assuming the funds AlphaDEX methodology continues to effectively identify high-potential stocks, and given its current technical indicators, a potential price target for FXZ could be in the range of $60-$65, representing a 9-18% increase from its current price. However, this forecast is contingent upon the funds ability to maintain its investment strategy and navigate potential market volatility.

Its essential to monitor FXZs performance, particularly its ability to stay above its 20-day and 50-day SMAs, and adjust the forecast accordingly. A break below these support levels could indicate a reversal in the short-term trend, while a sustained move above its 200-day SMA would be a bullish sign, potentially paving the way for further gains.