If you miss the days of worrying about Europe ...
Country funds from The Continent aren't the only ones retreating
to short-term oversold territory. But with so much focus on Asia,
the recent pullbacks in funds representing national stock markets
in the United Kingdom, France and Europe in general have gone
This could be a mistake for traders and active investors looking
to buy weakness and sell strength in bull markets. Here are a trio
of exchange-traded funds that high probability traders will be
watching as they move lower above the 200-day moving average.
Two consecutive lower closes have taken the
iShares MSCI United Kingdom Index Fund ETF
) from short-term overbought territory to short-term oversold above
the 200-day moving average. Trading at new, six-month highs at the
beginning of the month, EWU is pulling back to significant,
short-term lows for the second time since the fund climbed back
into bull market territory in late January.
That previous pullback had EWU closing lower for three days in a
row, twice in technically oversold territory, before buyers swooped
in, bidding the stock higher by more than 4% over the next five
Heading into trading on Thursday, EWU has a positive,
of just over one percent. The ETF also earned a one-point
to a neutral, 6 out of 10 midway through the session.
Comparable edges and short-term ratings are present in the
iShares MSCI France Index Fund ETF
), as well. With a positive edge of more than three-quarters of a
percent in the short-term and neutral ratings, EWQ has pulled back
by just under one percent in Wednesday's trading to finish at new,
two-week lows. Note that EWQ has only been trading above its
200-day moving average since the beginning of March.
Traders wanting a broader, more diverse exposure to European
equities may want to consider the pullback in the
Vanguard European ETF
Like EWQ, VGK has traded in bull market territory on a
consistent basis only since the first days of March. But in that
time, VGK has already tested the willingness of buyers to take
advantage of short-term
. A three-day sell-off in the ETF shortly after mid-month, took VGK
into oversold territory for two days in a row before the fund
reversed course, bounding higher by more than two and a half
percent in two days.
VGK sold off by 1% in Wednesday's trading, and has a positive
edge of just under that amount. VGK shares neutral ratings with
both EWQ and EWU.
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