Greek Debt Optimism Boosts European Funds: 5 ETFs for the Next 5 Days

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European debt crisis?!  What European debt crisis?!

iShares MSCI France Index Fund EWQ iShares MSCI Germany Index Fund EWG

Both EWQ and EWG have closed higher for four out of the past five trading days. The French fund was up just shy of 3%, while the German fund added more than 3%. Even the iShares MSCI Italy Index Fund ( EWI ) has gotten into the act, also up four out of the past five sessions and adding more than 3% ahead of trading on Friday.

What does all this mean to traders? All three of these ETFs are trading below their 200-day moving averages, a dangerous place historically speaking, for short term rallies. More often than not, short term rallies beneath the 200-day moving average are unsustainable and tend to result in similarly short term reversals back to the downside when these rallies rech overbought levels.

And the higher these funds climb below the 200-day moving average, and the deeper into overbought territory they trade, the more likely those short-term reversals will be.

Traders looking for opportunities to buy into the fear in Europe may be able to pick up funds like these at lower prices - or, at least, at less overbought conditions - in the next few days if history is any guide. And those who see opportunities in the possibility of these funds moving lower are increasingly seeing the edges shift toward their side.

A quick note on the exchange-traded funds from last week. Both the technology-related funds - the Direxion Technology Bull 3X Shares ( TYH ) and the ProShares Ultra QQQ ( QLD ) - have since made signficant gains. Three days after making our 5 ETFs for the Next 5 Days roster, shares of TYH were up 11%, while QLD gained more than 6%.

The gold funds from last week's list have moved up from oversold territory, with both the SPDR Gold Shares ( GLD ) and the iShares COMEX Gold Trust ( IAU ) gaining approxaimately 1% ahead of trading on Friday.

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David Penn is Editor in Chief of TradingMarkets.com



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Stocks

Referenced Stocks: EWI , EWQ , GLD , IAU , QLD

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