Investors are jumping into equities again as positive earnings propelled the major indexes toward previous highs, or in the case of the Nasdaq Composite, to new all-time highs. The segment of the equities known for growth characteristics such as increasingly positive earnings results has been performing particularly well. Based on the charts we’ll discuss below, it appears as though current levels on key growth-oriented funds could be the ideal place for traders to enter so that they can benefit from the likely surge in momentum that could transpire based on recent breakouts. (For more on this topic, check out: Stock Picking Strategies: Growth Stocks).

iShares Russell 1000 Growth ETF

One of the most popular ETFs for gaining exposure to an ultra-diverse basket of growth companies is the iShares Russell 1000 Growth ETF (IWF). In case you aren’t familiar, this fund is comprised of 608 growth stocks and trades with net assets of $35.2 billion. Taking a look at the chart, you can see that the bulls have been in control of the trend for the past year and the recent uptake in momentum suggests that this story is likely to continue. Notice how the news of the France Presidential election was enough of a catalyst to push the price beyond the resistance of a short-term channel pattern. The close above the upper trendline will be used by traders as a buy signal, and many will likely protect their position by placing a stop-loss order below either the 50-day moving average of previous lows near $112 depending on risk tolerance. (For more, see: Top 3 Growth Stocks for 2017).

iShares S&P 500 Growth ETF

For investors looking for increasing exposure to growth stocks within the U.S., one fund that could be worth a closer look is the iShares S&P 500 Growth ETF (IVW). As you can see from the chart, the pattern looks nearly identical to the one mentioned earlier. The recent breakout suggests that the momentum is in favor of the bulls and technical traders will likely continue to buy in anticipation of continued momentum. Active traders will also likely use the recent crossover between the MACD and its signal line (shown by the blue circle) as confirmation of the breakout. Stop-loss orders will likely be placed below either the lowest trend line or the 50-day moving average in case of a surprise pullback. (For more, see: Steady Growth Stocks Win The Race).

Vanguard Growth ETF

The last ETF that we will look at today, which will be a favorite amongst active traders who are looking for exposure to the recent breakout in growth stocks, is the Vanguard Growth ETF (VUG). In terms of liquidity and total net assets, this fund is regarded as the king of the mountain. With total net assets topping $60.2 billion, this fund comprised of 326 holdings, is also regarded as one of the most cost-effective methods (expense ratio of 0.08%) for trading U.S. large-cap growth stocks. Taking a look at the chart, you again see the same pattern as discussed above. The breakout from the short-term channel and bullish MACD crossover suggest that the bulls are in control of the momentum. (For more, see: 5 Characteristics of Good Growth Stocks).

The Bottom Line

Growth stocks have been on fire in recent weeks, and active traders have been tripping over themselves looking for ways to profit from the recent breakout. As discussed in the article above, growth-orientated ETFs such as IWF, IVW, and VUG could be the answers that many traders have been looking for. (To read more on this topic, check out: Glamorous Growth Stocks Lift This ETF).

At the time of writing, Casey Murphy did not own a position in any of the products mentioned.

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