Tuesday - March 21, 2006
EWJ Breakout
Japan won the World Baseball Classic and the iShares Japan ETF (EWJ) celebrated with a triangle breakout. The triangle represents a consolidation or rest after an advance. The breakout signals a continuation of the prior advance. Even though I find the breakout bullish, I also find Japanese stocks a bit overextended. As long as 13.7 holds, this breakout is in great shape. A move below 13.7 would question the breakout and further weakness below 13 would be outright bearish.
By Arthur B. Hill - Tue 21-Mar-06 at 02:43PM in International
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Tuesday - March 14, 2006
Japan Consolidates Huge Gains
The Japanese stock market has been one of the world’s stars over the last 12 months. After a 40% advance in the second half of 2005, the iShares Japan ETF (EWJ) consolidated the last few months. The pattern looks like a pennant or triangle and a move above the late February high (14) would signal a continuation higher. A support break would argue for a deeper correction that could extend to around 12-12.5. Such a pullback might offer a good chance to partake in the Japanese recovery.
By Arthur B. Hill - Tue 14-Mar-06 at 09:33AM in International
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Germany iShares Getting Overextended
The iShares Germany ETF (EWG) has also been a stellar performer since July 2005. The stock formed a reaction low in October and moved to the upper channel trendline in late January. This area represents overbought territory and the going has gotten a lot tougher around 22. However, the stock has yet to break down and surged on Friday. This establishes support at 21.3 and the bull is in firm control as long as this level holds. A move below 21.3 would argue for a correction or consolidation with a downside target around 20-20.5.
By Arthur B. Hill - Tue 14-Mar-06 at 09:33AM in International
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Thursday - August 11, 2005
Rising Sun
Despite a sharp decline in US stocks over the last few days, the iShares Japan ETF (EWJ) has risen sharply and is challenging resistance at 11. The pattern at work looks like a sharp advance and triangle consolidation. This can also be interpreted as a pennant, which is a bullish continuation pattern. There is a lot of support at 9.8-10 and a move above 11 opens to door to a multi-month advance. A failure and move below 9.8 would be bearish.
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By Arthur B. Hill - Thu 11-Aug-05 at 08:45AM in International
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And Rising Yen
The performance of a country based ETF is tied to its currency. For example, a rising iShares Japan ETF (EWJ) would be enhanced by a rising Yen and hurt by a falling Yen. Therefore, the ideal time for longs is when the country’s index and currency are on the rise.
I’ve already shown the iShares Japan ETF (EWJ) chart and this chart shows the Yen Index (XJY). A long white candlestick formed in July and this solidifies support around 89 (green oval). The index consolidated and then broke above 90 yesterday. The Yen Index now looks poised to move higher and this should benefit the iShares Japan ETF (EWJ) as a rising Yen can buy more Dollars.
By Arthur B. Hill - Thu 11-Aug-05 at 08:44AM in International
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Tuesday - July 26, 2005
Japan Consolidates
The iShares MSCI Japan Index (EWJ) is showing signs of life and a break above 10.4 would be most bullish. After the March-April decline, the stock formed a triangle over the last few months. These are neutral consolidations and a breakout is required for the next directional signal. EWJ broke above the upper trendline with a gap, but immediately fell back and we need to see some follow through before turning bullish.
A failure to follow through above 10.4 and a break below 9.9 would be most bearish. This would signal a continuation of the prior decline and target a move to around 9. The Japan ETF is noticeably weaker than the other Asian ETFs. While the Singapore, Malaysia and Hong Kong are breaking out to new highs, Japan was turned back at its June high.
By Arthur B. Hill - Tue 26-Jul-05 at 07:36AM in International
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Tuesday - April 12, 2005
Dark Clouds Over Russia
The Wall Street Journal reports that Russia is demanding back taxes worth around $790 from Joint Venture run by British Petroleum. This is clearly not good news for foreign investment in Russian oil and represents another step backward for business in Russia. There are a number of Russian ADRs traded in the US, but news like this does not exactly bolster confidence. Some Russian ADRs include: MTL, MBT, ROS, TNT, VIP and WBD.
By Arthur B. Hill - Tue 12-Apr-05 at 06:22AM in International
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