There is a change to the First Trust Focus Five Model (FTRUST5).

There is a change to the First Trust Focus Five Model (FTRUST5), which is the underlying strategy for the First Trust Dorsey Wright Focus Five ETF (FV).

This marks the first change to the First Trust Focus Five Model since April of this year and involves the removal of the First Trust Nasdaq-100 Ex-Technology Sector Index fund (QQXT) as it fell below the sell threshold in the Model’s relative strength matrix. In its place, the Focus Five Model is adding the First Trust Nasdaq Semiconductor ETF (FTXL), which is currently the number 1 ranked fund in the Model’s matrix.

On the point and figure trend chart, FTXL has maintained a positive trend since May of this year and rallied to new highs in the latter part of October. The fund possesses a strong fund score of 5.88 as of Tuesday’s (11/11) close) and maintained a score above 5 since July this year, following a return to a market relative strength buy signal. November’s action brought prices to near highs to kick off the month, only to see the trend chart reverse and give a sell signal at $120, initiating a shakeout pattern. Conveniently enough, FTXL reversed into Xs during Monday’s trading session, which marks the action point for the shakeout pattern. From here, the pattern would be complete upon a triple top break at $130.

With the change, the First Trust Focus Five Model (FTRUST5) will rebalance the five holdings to equally weighted at 20%, and the strategy will maintain exposure to Technology (through FTXL and FDN), Industrials (FXR), Utilities (FXU), and Financials (FXO).

Along with the change to the First Trust Focus Five Model (FTRUST5), there is a change to the First Trust Dynamic Focus Five ETF (FVC) as the cash allocation decreases from 52% to 48% as of today’s evaluation. The remaining 52% of the allocation will be equally weighted (approximately 10.4%) among the five sector holdings within the Focus Five Model.