In an earnings season that has largely focused on the banking giants, it may be time for fintech to take center stage. According to Wolfe Research, the Global X FinTech ETF (FINX) has been lagging behind the broader market for some time, but recent technical signals suggest it may be poised for a breakout.
Rob Ginsberg, a technical analyst at Wolfe Research, highlights the ETF’s positive momentum in a recent note to clients. He notes that FINX has carved out a solid base over the past two years and is approaching a critical juncture that could determine its future direction.
Despite a sharp decline in late 2021, FINX has managed to recover modestly, delivering a total return of over 7% in the past three months. The ETF’s largest holdings, including PayPal, have yet to report their earnings for the current cycle, which could serve as a potential catalyst for growth.
Ginsberg points to several positive technical indicators for FINX, including an uptrend from October and continued support from trendline support. However, he also acknowledges that upcoming earnings reports could present downside risks for fintech stocks and the ETF itself.
It’s worth noting that FINX carries a relatively high expense ratio of 0.68%. Investors should carefully consider this factor before investing in the ETF. Nonetheless, with its potential for growth and technical momentum, FINX could be an attractive option for those looking to gain exposure to the fintech sector.
