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German Opportunity – Take II

ByGregory W. Harmon
Published 02/07/2014, 09:49 AM
Updated 07/09/2023, 06:31 AM

A little more than a week ago I noted an opportunity in the Germany market in DAX: An Opportunity For Investors. The set up ended up failing so I took my stop loss and moved on. But I remain interested in the German market and see it gave another buy signal Thursday. And this one comes with some added firepower behind it. The chart below shows the bottoming that took place earlier this week at the 100 day Simple Moving Average (SMA). The two doji candles followed by a confirmed reversal Thursday. This offers a trade opportunity against a stop under Tuesday’s low.The DAX
The technical momentum indicators are mixed with the MACD continuing lower but may be flattening, while the Relative Strength Index (RSI) has bottomed and turned higher. And this is where it looks better than the previous set up. This time the low in the RSI was below the low in the RSI in December while the price low was higher than December's low. That's called a positive RSI reversal and it targets a move higher equal to the last move -- in this case, to 9881.

All of which makes for a reward-to-risk ratio of 3.37 to 1 against the previously mentioned stop. This translates to the German ETF (EWG) as stop around 29.10 against Thursdays closing price at 30.10 and looking for a new high over 31.93.

Latest comments

I LOVE comedy. Apparently, yo u didn't get the email... . Now . . where is Germany's GOLD? Oh yeah . . . the US "lost it".. . ALL world markets plummet within days.
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