Japanese iShares Over the Edge? The perfect time to be a bear…

February 8th, 2008 • Related • Filed Under




For the better part of ’06 and ‘07 it appeared that the Japan iShares (EWJ:NYSE) was building momentum for another push to the upside. Fortunately for the technically savvy investment crowd, all the signs had become apparently clear that the upside potential wasn’t meant to be.

Japan iShares EWJ

Back in September of ’06 you can see the first signs of zapped momentum on the multi-year monthly chart above. The MACD indicator had a negative divergence. But it wasn’t until November of ’07 when the DMI trending indicator joined in on the bearish sentiment. Even the Bollinger Bands began to split wide open. Get ready for a big move – to the downside.

Now that both indicators have broken down, look to short the EWJ into the ground or buy put options. It’s a waterfall of profits waiting to happen.

Good investing…
Stephen

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