After the volatile trading of the past few weeks, few major ETFs are back at 52-week highs and showing multiple bullish patterns. But one of them is the iShares Global Infrastructure ETF (IGF). The first question we should ask ourselves is, “Why is IGF showing such strong relative strength while so many other sectors have been tumbling recently?” The answer is easy to understand. This ETF just doesn’t hold high-beta growth stocks that have soared, crashed, and soared again. According to ishares.com, IGF is made up of 74 holdings, but only represents three sectors: Utilities: 42%, Capital Goods: 37%, and Energy: 21%. Utilities and Capital Goods have held up well recently, but energy has not. But one particular group within this sector has been outperforming: Oil & Gas Midstream, which is involved in the transportation and storage of oil. In fact, many of IGF’s energy holdings are within 5% of their respective highs. This is a big difference when compared to stocks within broader energy ETFs such as the Energy Select Sector SPDR (XLE). Daily Bullish Pattern Breakout Now we know why IGF is doing well. Let’s start with the daily chart to see what the future holds for the ETF. IGF went almost parabolic from April 16 to May 15, rising 12% in 21 trading days. It has since digested that move and is now forming a three-month bullish inverse head and shoulders pattern. A sustained breakout from this formation would bring an upside target near $53.50, which would be a new 52-week high. Given that IGF has leveraged two other bullish setups during its recovery from the October 2023 low, such patterns should not be ignored. Weekly Bullish Pattern Breakout IGF is currently attempting to break above the daily bullish formation mentioned above, but the ETF has already broken out of a weekly bullish pattern this spring. In fact, a short-term pattern has formed just above the long-term breakout zone. Simply put, when a breakout of short-term and long-term bullish patterns occurs simultaneously, it creates a constructive technical backdrop. Long-Term Trends In the history of IGF, the ETF has made new all-time highs every few years. The last time it made a new all-time high was in April 2022, about two and a half years ago. From this perspective, it would not be surprising if IGF were to make another all-time high in the near future. To do so, it would need to take advantage of the bullish patterns mentioned above. At the very least, IGF offers a less volatile, better performing alternative for those looking for exposure outside of high-growth stocks. – Frank Cappelelli Founder: https://cappthesis.com Disclosures: (None) All opinions expressed by CNBC Pro contributors are the contributors’ own and do not necessarily reflect the opinions of CNBC, NBC UNIVERSAL, its parent or affiliates, and may have been previously disseminated by the contributor on television, radio, the Internet or another medium. The above content is subject to our Terms of Use and Privacy Policy. This content is provided for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to purchase any securities or other financial assets. The content is general in nature and does not reflect any individual’s unique circumstances. The content above may not be suitable for your particular situation. You should strongly consider seeking the advice of your own financial or investment advisor before making any financial decisions. Click here for the full disclaimer.
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