German Stocks Creating Potential Topping Pattern (EWG)

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September 5, 2018 6:13am NYSE:EWG

From Chris Kimble: The chart below looks at the DAX index from Germany over the past 20 years. Even though this important index has traded sideways for the past 18-months, its long-term trend remains up.

While the DAX has been trading sideways for the past year and a half, it could be creating a head & shoulders topping pattern at (2).

The softness in the index has it currently testing the bottom of its trading range and 9-year rising support line (1) at (3).

Bottom line-One of the most important support tests in nearly a decade is in play at (3) for the DAX. If this support breaks it will have an important influence on other indices in Europe and potentially stocks in the states.

The iShares MSCI Germany Index Fund ETF (EWG) was unchanged in premarket trading Wednesday. Year-to-date, EWG has declined -9.48%, versus a 9.04% rise in the benchmark S&P 500 index during the same period.

EWG currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #34 of 90 ETFs in the European Equities ETFs category.

This article is brought to you courtesy of Kimble Charting Solutions.

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