Sunday, December 18, 2016

EWI: "The Italian Job"

Greetings traders,

We have all witnessed recently the hype of the Italian referendum and the associated rescue plan of the italian banks.
Still lots of bearish news may come up, however we believe that Italy is getting out of the woods following a bear market that started in June 2014.
Why?
Well, you can clearly notice to the following chart that Italy ETF (EWI) has formed an excellent bullish bat pattern starting from July 2012 low and finishing in July 2016 low.

The targets of the Bullish Bat are 
1st target: 26.64
2nd target: 30.5

Now, let us zoom in to the chart....

We can see that EWI following the lows of July 2016 formed a decent bullish Gartley pattern and after completion of the pattern the price zoomed higher towards the current levels.

However, we can see that there is a convergence of multiple resistance lines (AD 0.236 fibo, descending bear market trendline, inverted H&S neckline, pitchfork trendline from the current upmove) at current levels.Therefore we expect some kind of correction or consolidation.
Overall we think that Italy is very bullish, especially for the long-term.
Safe trading!