Mexico Eyes The EWW Wall
Dragonfly Capital | May 31, 2017 09:40AM ET
President Trump has been talking about building a wall between the US and Mexico for over a year. As time has moved on in his young presidency, that talk has slowed. But the Mexican’s have not stopped thinking about it. In fact the Mexican stock market has been plodding higher and is now at its own wall – ready for a break out.
The chart below shows the Mexican ETF (NYSE:EWW) over the last 3 years on a weekly basis. After falling from a top in the summer of 2014 it started to slow the slide in late 2015. Since November 2015, it has slowed to a trickle, lower against falling trend resistance. It made a lower low after the November elections, but is now back at that resistance. Will it break down the wall and push higher?
Momentum indicators offer a bit of a mixed story. The RSI is at 2-and-1/2 year highs, but in the short term it's testing a move lower. The MACD is also at highs but leveling, showing a waning momentum. The price has also stalled far below the 200-week SMA, although it is above the 200-day SMA (40 week), which is a bullish indicator.
The wall has come into play in a different way in Mexico. A break above it could easily see a 10-15% move to the upside. But rejection at the wall would suggest a continued trickle lower and a new low 15% below. Keep an eye on the wall.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.