The Spain ETF (EWP) Is Consolidating Above Its 50-Day Moving Average

Share This Article
June 5, 2013 11:32am NYSE:EWP

spainStocks failed to follow through on Monday’s bullish reversal action and sold off most of the day, with all indices closing in negative territory. A bounce in the final hour of trading allowed the averages to close off the lows of the session,

but still in the bottom third (or so) of the day’s range.

Lighter volume on both exchanges prevented the Nasdaq and S&P 500 from suffering another distribution day. As we have mentioned in the past, our timing model is based on the price and volume action of broad market averages and leading stocks. The volume pattern in the NYSE and Nasdaq has turned bearish over the past few weeks, which places all the burden on the leading stock portion of the model (which has held up all year). If leading stocks continue to hold up, then we would expect the current correction to be shallow or short-lived. If leading stocks break down en masse, then we could potentially see a deeper correction.

While many Pacific Rim ETFs have taken a beating the past few weeks, we are seeing some stability from Europe with the iShares MSCI Spain (NYSEARCA:EWP) consolidating above its 50-day moving average on a daily chart. The monthly chart below shows $EWP trading just below the downtrend line:

$EWP monthly downtrend line

The weekly chart below shows the recent strength in $EWP since it cleared the weekly downtrend line (DT1) last summer. After stalling out at $32 in January, the price action has pulled back to the (now) rising 40-week MA and held. Now that the short-term downtrend line (DT2) is broken and $EWP is back above the 10-week MA, we can look for the price action to tighten up and potentially form a low risk entry point in the next few weeks. A move above $33 would produce a breakout on multiple time frames (monthly and weekly), which is always a bullish sign.

$EWP weekly basing action

Learn how to trade like a pro with our best-selling Swing Trading Success Video CourseClick here to learn more and to view free sample training class.

9 "Must Own" Growth Stocks For 2019

Read Next

Get Free Updates

Join over 50,000 investors who get the latest news from!

Most Popular

Explore More from

Free Daily Newsletter

Get daily ETF insights from our market experts. Never miss another important market development again! respects your privacy.

Best ETFs

We've rated and ranked nearly 2,000 ETFs and ETNs using our proprietary SMART Grade system.

View Top Rated ETFs

Best Categories

We've ranked dozens of ETF categories based on relative performance.

Best ETF Categories