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By Mike Paulenoff, www.MPTrader.com
In general, the EWZ exhibits a VERY constructive intermediate term chart pattern. All of the price action off of the Jan. low at 64.00 represents the start of a new upleg within the existing longer term bull trend that started in 2002 near 5.00. Furthermore, the decline off of the Feb. 28th high at 88.77 to the March 20 low at 72.11 appears to me to be a completed pullback, and the start of a new upleg that projects to retest 88.00-81.00 on the way to 91.00-93.00. Let's notice how much respect the price structure (investors) have exhibited during tests of the sharply rising 200 DMA. As we speak, my work argues that investors are about to show a high degree of respect for the sharply rising 20 & 50 DMAs, which could propel the EWZ to retest the Feb. highs. Of course, some help from some of the other global equity markets (like the U.S.) certainly will be supportive, but not absolutely necessary for the EWZ to continue higher. For starters, the EWZ has to hurdle 85.20/30 to trigger upside acceleration.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
