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Written and copyright © 2008-2011 by Thomas N. Bulkowski. All rights reserved.
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
Copyright © 2008-2011 by Thomas N. Bulkowski. All rights reserved. Welcome to Psychiatric voice mail. If you are co-dependent, please ask someone to press 2.
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