Completed Corrective Period for German ETF
by Mike Paulenoff, www.MPTrader.com
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My near- and intermediate-term pattern and momentum work in the iShares German Index Fund ETF (NYSE: EWG) argue that all of the action from the Oct '09 high at 23.40 into last Tuesday's low at 17.97 represents a completed corrective period in that aftermath of the Mar '09 to Oct '09 advance. Let's keep in mind that current strength comes off of 17.97, which was the 50% support plateau of the entire upleg during 2009, and a sign that the EWG is trading very technically at the moment.
In addition, let's notice that at last week's low at 17.97, daily RSI established a higher low, suggesting strongly that the EWG "bears" were running out of steam. At this juncture, I am expecting the EWG to establish a near-term, base-like formation between 19.50 and 18.60 during the upcoming days prior to a run at 22.00.
