Bulkowski's Blog Archive: EWH

Written by and copyright © 2005-2020 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.

Blog Posting: March 6, 2008, Hong Kong ETF (EWH)

The chart shows the only interesting ETF or index that is worth talking about today. After a symmetrical triangle formed at the end of last year, a new pattern emerges, called a falling wedge.

A falling wedge highlights price bounded by two converging and down-sloping trendlines. Upward breakouts occur most often: 68% of the time and that should not be a surprise, given the shape of the pattern (down-sloping trendlines).

The measure rule is used to predict a price target and it says that price should climb back to the top of the pattern (point A), but that only works 70% of the time. That's still not bad, and in this case, it corresponds to round number support near 20. That is where I would expect price to stall if it does, indeed, breakout upward. But first, it has to push through overhead resistance setup by peaks in February (B and C) at about 19.40.

Since this is an exchange traded fund and trying to figure out what the ETF contains is difficult, the fund may blow through resistance without stopping. It all depends on what the underlying securities do.

EWH Aftermath

As the updated chart shows, price dropped out the bottom of the pattern, a direction I did not expect.

-- Thomas Bulkowski

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