Germany ETF in Bullish Digestion Period

Although the iShares MSCI Germany Index ETF (EWG) has experienced a 5-6% decline during the past week, my pattern analysis argues that all of the action off of the Nov 4 high at 24.92 represents a sideways, bullish digestion period. When complete this should resolve in another thrust to the upside that projects to 27.00-plus in a resumption of the larger bull leg off the May 2010 low at 17.97.

The current downleg should end in the 23.00-22.80 area prior to a climb that tests key near-term resistance at 24.40/50. If (when) hurdled, this will point the EWG towards new post March 2009 recovery highs.