According to a
, credit rating agency Fitch has confirmed its top notch 'AAA'
credit rating on the French Economy. Over the current fiscal
year, the French economy has been on the radar of all the rating
agencies while facing rating downgrade from the other two
(Standard & Poor and Moody's), earlier this year (see
3 Emerging Market ETFs Protected from Global
Stronger European economies like France and Germany have been
under constant pressure to bail out their debt plagued neighbors
which has caused had a massive impact on their own balance sheet.
As a result, the economy has been downgraded twice in the current
fiscal year, first by S&P and later on, less than a month
ago, by Moody's Investors services.
However, this has not led the French ETF down by any standard
as the French ETF
is looking pretty strong. In fact, analyzing quarterly
performance of the French ETF reveals that it had performed the
best in the 1
quarter of Fiscal 2012 - the quarter in which it was downgraded
by S&P. EWQ added about 12% in the quarter (see
France's Credit Downgrade: How Does it Impact the
Interestingly the ETF is showing similar characteristics on
its second downgrade this quarter. EWQ is up by almost 8% quarter
till date in the final quarter of this fiscal and exhibits
On December 5
EWQ has surpassed its previous 52-Week high level of $22.87 from
its March 2012 lofty levels. EWQ has surpassed its 50 Day Moving
Average line (Blue) after a week of range bound trading leading
up to its rating downgrade.
However, it is quite impressive to see that the ETF has
rebounded from its 100 and 200 Day moving average lines (Red and
Green Lines respectively) indicating strong support.
During the same time its 100 Day Moving Average line had
surpassed the 200 Day moving average line indicating a bullish
reversal and confirming the trend are two very important
1) The ETF has been making higher highs on 2 consecutive
occasions after 5
December 2012, to be precise $23.04 on 11
December and $23.26 on 12th December, 2) The 100 Day Moving
average line is upward rising making a bullish case for the
French ETF (see more in the
Still, the ETF is near overbought territory at the
present moment, with the Relative Strength Index (RSI) showing a
reading of 69. This makes a case for a minor technical correction
in the following few trading sessions which has probably started
as indicated by yesterday's trading session when the ETF slumped
a tad to close at $23.04.
Nevertheless, the charts certainly hint towards the positives,
and investors willing to take a call on EWQ can wait for a few
more sessions to bargain for a good entry point for a further
Currently EWQ has a
Zacks Rank of 3 or 'Hold'
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ISHARS-FRANCE (EWQ): ETF Research Reports
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