EWG Germany Daily Chart Positive Divergence Bounce Lower Lows Lower Highs Pattern

EWG chart shows the results of the positive divergence bounce Keystone talked about a week ago. The green lines show the lower prices that were occurring, but all the indicators were sloping up; positive divergence. Also, the stochastics were oversold, other indicators were near oversold and the lower prices resulted in a falling wedge pattern which was all bullish, so the bounce occurred as the technicals forecasted. Note that, despite the bounce, the pattern of lower lows and lower highs (black dots) continues. Yesterday's final print candle shows a hanging man, as well as price testing the 20 MA resistance at 19.62, so watch for a reversal back down.

Overall, the indicators remain constructive to some further upside in the days ahead. The key is when price prints 21 since then the indicators can be studied to see if any negative divergence occurs from late August to now. Money flow and RSI is very constructive for some further upside to at least 21. Watch the 50% levels for RSI, stochastics and money flow since these moves will place feathers in the bulls cap. Projection is a potential pull back to test the 17.80-17.90 support but the chart remains constructive, and further upside to 21 and 22 appears on tap, and this move would nullify the lower lows and lower highs pattern.

This is short term stuff, coming days, weeks, a month or so, and, as is the case now, any negative Eruo news will pummel Germany despite the cosntructive chart. The weekly chart remains sick so the positive outlook on Germany in this short term time frame should be relatively short-lived; the intermediate and long term prospects point to sideways to sideways down for the months ahead. Thus, smart technicians already made their dough on the positive divergence bounce over the last week. Not enough reward for entering long now, probably best to see if the 21-23 area prints and think about a short depending on the chart set up when that occurs. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or on any links associated with this site. Consult your financial advisor before making any investment decision.