Technical Analysis: MSCI EMU SMALL CAP: bearish excess below the major support

The MSCI EMU Small Cap is an equity index representative of the most liquid stocks in the Euro zone having a capitalization of between $200 million and $1.5 billion USD. The index presented a bullish dynamic materialized by a ...

Day By Day – Indipendent Research

succession of troughs and peaks which were higher and higher and supported by the 100-day moving average. However, the deep bearish correction initiated in the month of May as well as the bearish reversal of the moving average incites us to be cautious as to the configuration of the index.  We are therefore neutral in the medium-term, not anticipating new peaks in the weeks to come….

25072011 1

Close price160.8

2 months OpinionNEUTRAL
2 weeks OpinionPOSITIVE

Resistances168 / 176,48 pts
Supports159,1 / 151,93 pts

Anticipation :

In the shorter-term, the bearish acceleration initiated after the failure to pass the resistance at 168 points has led to the breaking of the major support at 159.10 points. This solid support nevertheless was immediately reintegrated, indicating a simple bearish excess (dotted blue circle). This movement very much resembles the movement of last summer. The consequences of this configuration are generally bullish.  We can anticpate a rally in the direction of the previous peaks.  
We are positive in the short-term and envision joining the resistance at 176.48 points, with an intermediary target of 168 points. We place the invalidation threshold of this positive opinion slightly below the major support at 159.10 points.
Traker’s NameLeverageExpense ratio
CS ETF (IE) on MSCI EMU Small Capx10,58%
iShares DJ EuroSTOXX SmallCapx10,40%
iShares STOXX Europe all 200 (DE)x10,21%
Lyxor ETF MSCI EMU Smallx10,40%
SPDR MSCI Europe Small Cap ETFx10,40%

Follow-up Analysys: Our DBD Tracker dated 27/06/2011 recommended the purchase of the STOXX Europe 600 Health Care index. Since then our final target of 411.17 points was attained and overflowed, or a performance of 3.7%.

* A leverage of 1 means that the ETF/Tracker has the same performance as the underlying index. A leverage of 2 indicates that the ETF/Tracker will have twice the performance of the underlying index. A leverage of -1 indicates that the ETF/Tracker will perform opposite that of the index: it will rise while the index falls, and vice versa.



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Source: ETFWorld – Day By Day – Indipendent Research



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