Monday, August 10, 2009

A couple of ETFs from the Blogosphere

There appears to be a template which can applied to almost any ETF or stock chart; the rally-pause-rally has proven to be a common theme throughout the market place (other than inverse ETFs of course!). The following two ETFs don't break this mould but they might have the legs to keep going as others start to fail.

At TheStockAdvisors, Carl Delfeld has been looking at iShares Sweden (EWD).

Trading at just over ten times earnings, it seems oversold compared with many other European developed markets trading in the mid and high teens as well as some emerging markets such as Mexico at 18 times, Taiwan at 25 times, and India at 21 times earnings.

Like most global indices which have rallied from June lows the Swedish ETF, EWD, is looking rich in the short term. The weighted 20-day MA is the watch area here; in the initial advance off the March reaction low tests of the 20-day WMA were greeted eagerily by buyers. The same could happen again on the next test. Stops can go on a break of $20.18 support. A push above $22.80 opens the possibility for a measured move to $25.50, or beyond to the larger target of $28.30. took a look at some retail sector ETFs and noted how their performance is going against the grain, particularly when measured relative to the S&P:

.... if there's one area that should surprise every market watcher, it would be the success of retail ETFs. Save the big box stores, retailers failed miserably in July and they showed little evidence that a back-to-school surge was in the making. Worse yet, with more and more folks not working… by choice or by layoff… who would expect goodwill for this consumer sub-segment?

The SPDR Retail ETF (XRT) enjoyed a very clean rally from $17.85 to $29.06 from March through May; it then consolidated for just over two months before setting off on its latest advance. Given the strength of the aforementioned rally it would not be unreasonable to look for a measured move advance to bring XRT to $37.07.

Track these ETFs using Zignals alerts; follow the latest break-and-run and alert if the measured move targets are hit.

Good luck!

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts, and stock charts website

blog comments powered by Disqus