For investors looking for momentum, First Trust Nasdaq Retail ETF is probably a suitable pick. The fund just hit a 52-week high and is up 40.4% from its 52-week low price of $27.79/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

FTXD in Focus

The fund seeks to track the performance of the Nasdaq US Smart Retail Index. It has AUM of $25.2 million and charges 60 basis points in annual fees.

Why the Move?

Market pundits anticipate an impressive retail sales figure in 2021 and a strong holiday season. In an encouraging development, the retail sales data was remarkable. The metric rose 1.7% in October (the largest surge since March), beating economists’ estimate of a 1.4% rise. The strength in consumer sentiment can be the major driving force as the same is believed to be prepared with enough resources to splurge this holiday season after facing restrictions for more than a year. Retailers are also strongly gearing up for the start to the holiday season (the late October-December period) that is considered a busy season for many industry players and market participants. Several surveys have shown that the proportion of the population planning to go on vacation has shot up to the highest level since February 2020. This is making funds like FTXD an impressive investment option.

More Gains Ahead?

It seems like the fund will remain strong, with a positive weighted alpha of 38.20, which gives cues of a further rally.