iShares Italy ETF (EWI) Reverses From New Multi-Year Highs

Marco Di Dionisio

ishares italy etf ewi decline stock chart analysis_february 5

There’s a lot going on over seas. Specifically in Italy.

Today, I want to highlight the stock chart of the iShares Italy ETF (EWI), pointing out some key price levels along with some news and fundamentals:

–  Important spot here for the Italy ETF (EWI) after this week’s pullback as it comes off overbought reading.

–  The EWI has been on a tear for the last year. It closed out 2017 with a +28.5%. It continued the strength into 2018 as it’s a top five ETF, YTD.

–  But something may be changing shorter term. There are highly charged political elections coming up on March 4th and some are wondering if it might be time to take some money off the table.

–  Ray Dalio’s Bridgewater has a large short bet on Italy, particularly on Italian banks. Important, because the EWI allocates 34% of its weight on Italian banks.

–  The long term uptrend here is very strong. It would likely take more than just political turmoil to change that, but it could warrant some caution in the short term as election day nears.

–  There could also be a powerful relief rally if the anti-EU “Lega” and “Five Star Movement” parties don’t do as well expected.

–  The way to play Italy here will depend on one’s time frame and trading styles. As the election nears, their could be some headline pressure on the EWI. The longer term picture, however, is still largely intact, until price tells us otherwise.

Thanks for reading. Arrivederci!

 

Twitter:  @DDCapitalFund

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

 

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