iShares MSCI Mexico Index Fund (EWW) may have completed a rally last week that could lead to further downside. The underlying pattern structure of EWW over the past six-months has many similarities to the S&P500 Index. EWW broke down from a bearish Head & Shoulders (H&S) top in early-May before finding support at $53.49 and bouncing.
An Inverse H&S reversal pattern was then formed with EWW breaking to the upside less than two-weeks ago. Although the neckline resistance, around $60.20 has not yet been reached, last week’s high at $58.99 reached the measuring objective from the Inverse H&S, matched previous support off the head of the H&S Top, and was just shy of the 61.8% retracement of the downtrend off the right shoulder.
Further strength back up towards $59.00, or even $60.20 could present a new shorting opportunity. (www.etf-portfolios.com)
