{"id":1985,"date":"2012-09-10T21:32:35","date_gmt":"2012-09-11T01:32:35","guid":{"rendered":"http:\/\/www.morpheustrading.com\/blog\/?p=1985"},"modified":"2022-04-06T15:07:29","modified_gmt":"2022-04-06T19:07:29","slug":"ewh-hong-kong-etf","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/ewh-hong-kong-etf\/","title":{"rendered":"Hong Kong ETF Is Heating Up ($EWH)"},"content":{"rendered":"<p>In uptrending markets, a vast majority of our ETF trading entries are <em>Breakouts<\/em> to new highs and <em>Pullbacks<\/em> to near-term support levels of strongly trending ETFs. However, we sometimes take advantage of <em>Trend Reversal<\/em> swing trades for quick, momentum-based &#8220;pops.&#8221; An example of this is our recent winning trade of an 8.5% gain in DB Gold Double Long ($DGP), which we bought after it broke out above both its 200-day moving average and one-year downtrend line. Now, another potential <em>Trend Reversal<\/em> play is setting up in<strong> iShares Hong Kong Index ($EWH)<\/strong>, an international ETF.<\/p>\n<p>Starting with the weekly chart, you will see that $EWH is testing resistance of a downtrend line that has been in place since early 2011. It has also formed two &#8220;higher lows&#8221; since then, which are annotated on the chart below:<\/p>\n<p><img decoding=\"async\" title=\"Potential trend reversal in $EWH\" src=\"https:\/\/www.morpheustrading.com\/charts\/2012\/120911$EWHweeklychart.png\" alt=\"$EWH potential trend reversal\" \/><\/p>\n<p>When buying <em>Trend Reversals<\/em>, we never try to catch the absolute bottom because it is risky and foolhardy. Rather, we prefer to see sufficient confirmation that a significant bottom has formed before attempting to buy. The two &#8220;higher lows&#8221; on the weekly chart above are positive because it indicates key bottoming action. However, it is also important to look for confirmation of intermediate-term trend reversal on the shorter-term daily chart interval. For this, we need to see that the 20-day, 50-day, and 200-day moving averages have all begun to slope higher. Finally, we need to ensure that the 20-MA is above the 50-MA, and the 50-MA is above the 200-MA. Typically, it takes at least several months from the absolute lows for these events to occur. In the case of $EWH, it also meets these requirements on the daily chart. Take a look:<\/p>\n<p><img decoding=\"async\" title=\"Improving daily chart pattern of $EWH\" src=\"https:\/\/www.morpheustrading.com\/charts\/2012\/120911$EWHdailychart.png\" alt=\"$EWH daily chart pattern\" \/><\/p>\n<p>Because yesterday was the first day of price correction in the broad market since last week&#8217;s breakout, we are not yet listing $EWH as an &#8220;official&#8221; ETF trade setup on our trading watchlist today. Nevertheless, it is now on our radar screen and we will report our exact entry, stop, and target prices to subscribers of <a title=\"The Wagner Daily newsletter\" href=\"https:\/\/www.morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener\">our ETF and stock picking newsletter<\/a> if we decide to target $EWH for new trade entry.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In uptrending markets, a vast majority of our ETF trading entries are Breakouts to new highs and Pullbacks to near-term support levels of strongly trending ETFs. However, we sometimes take advantage of Trend Reversal swing trades for quick, momentum-based &#8220;pops.&#8221; An example of this is our recent winning trade of an 8.5% gain in DB [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[3],"tags":[],"class_list":["post-1985","post","type-post","status-publish","format-standard","hentry","category-stock-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/1985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=1985"}],"version-history":[{"count":1,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/1985\/revisions"}],"predecessor-version":[{"id":11712,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/1985\/revisions\/11712"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=1985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=1985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=1985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}