Japanese Stocks Attempting 22-Year Breakout (EWJ)

From Chris Kimble: While stock indices in Asia and Emerging markets have been very weak this year, Japan is reflecting relative strength compared to them (down a good deal less).

This chart looks at the Nikkei 225 index over the past 30-years on a monthly basis.

At this time the Nikkei index is attempting to break above its 1996 highs and it is testing the halfway point (50% retracement level) of the 1989 highs and 2009 lows at (2).

If the Nikkei index breaks out at (2), it will send a bullish message to this index which would spill over into hard-hit stock indices in Asia. If it should break out it would send a positive message to stock in the states as well.

What the Nikkei does at (2) will be very important for stock markets around the world. Keep a close eye on what this index does in the weeks ahead.

The iShares MSCI Japan ETF (EWJ) fell $0.25 (-0.43%) in premarket trading Tuesday. Year-to-date, EWJ has declined -2.42%, versus a 9.02% rise in the benchmark S&P 500 index during the same period.

EWJ currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #14 of 78 ETFs in the Asia Pacific Equities Ex-China ETFs category.


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