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Stock Ideas Investors Daily Edge Critical Value Alert
Stock Ideas Investors Daily Edge Critical Value Alert 
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By Andrew Gordon Now that Thursday’s 362-point drop is a few days behind us, let’s pause a second and try to see the big picture. Though it may not feel like it, three of our major asset classes are up for the year: stocks, bonds, and commodities. Only the dollar is down. |
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| Critical Value Alert |
| Thursday, 10 July 2008 | ||||||||
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The iShares MSCI Germany ETF (EWG) will make a lot of people a lot of money in the next 12 weeks… but not everyone. This chart shows EWG trading at a critical support level. A rule of thumb for trading is that major support lines normally hold while minor support levels usually break. What that means for EWG is uncertainty: a jump back to recent highs or a fall off a cliff.  I’m biased towards a fall off the cliff. Just look at momentum getting ready to turn negative like Karl Rove in a presidential campaign. Not to mention that manufacturing numbers show a fall of 2.4% when economists expected a rise of 0.3%. So here’s how to trade it: A failure here means a quick tumble to $22 (from a current price of $28.50) with an ultimate hard landing all they way down at $8, however unlikely that seems. A bounce here should be played a bit more tentatively, since upside is more limited.
Sara Nunnally Editor, Taipan Trader
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