German stocks take the lead
The nation's stock market has been among the world's top performers. If you're looking for strong technicals, good value and high yield, consider these 4 plays.
- EWG has bounced nicely from the lows with next key retracement resistance at $27.37-$27.76
- A close above this resistance would project a move to the $30 area
- The relative performance, or RS analysis, broke out to the upside in late March, overcoming resistance at line a. It is now in a strong uptrend, line b
- The daily on-balance volume (OBV) pattern is less positive, as it is still below its downtrend, line c. It has moved above its weighted moving average (WMA)
- If the recent lows at $25.58 are violated, there is converging Fibonacci support at $25.32, which would be expected to hold
- There is additional support at $122.20-$124.63 and then at $118. The weekly uptrend (line e) is at $112
- The weekly OBV made significant new highs this year after breaking through the resistance, line f, in January
- The daily OBV does allow for a test of the recent lows
- There is initial resistance now at $135-$139
- The 38.2% support from the May 2010 lows is at $57.88 with additional support in the $56.50-$57 area. The 50% retracement support is at $54.65
- The breakout level from early in the year comes in the middle of these zones at $55.85 (line a)
- The weekly OBV has turned up from its rising weighted moving average and did confirm the recent highs. The OBV surged through long-term resistance, line c, in early 2011
- There is initial resistance for SAP at $63.35-$64.50
- The recent decision to close all nuclear plants in Germany coupled with weak gas prices has pushed EONGY slightly below the 2010 lows at $26.80
- EONGY is trying to bounce after briefly violating support lows (line e), and a higher close this week would be positive
- There is first significant resistance at $29.50 with further resistance at $30.50. The weekly downtrend, line d, is at $33.84
- There was a large volume spike in early May as EONGY went ex-dividend. The dividend amount was $2.11 for a current yield of 7.4%
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Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
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