Conclusion, Investment Implications, Strategy
Today’s emerging resumption of the larger 2019 advance in the iShares MSCI Pacific ex Japan ETF (EPP) targets a 9% rise to 51.50 that will remain valid above the $46.16 area. This is an Asbury Momentum idea.
Analysis and Rationale
The iShares MSCI Pacific ex Japan ETF (EPP) seeks to track the investment results of the MSCI Pacific ex Japan Index. The fund normally invests at least 95% of its total assets in the securities of its underlying index and in depositary receipts representing securities in its underlying index. It will at all times invest at least 90% of its total assets in such securities. The underlying index consists of stocks from the following four countries or regions: Australia, Hong Kong, New Zealand and Singapore. It will include large- and mid-capitalization companies and may change over time.
Chart 1 below plots EPP daily since Q4 2017 along with its 200-day moving average, a widely-watched major trend proxy. The green highlights point out that price appears to be resuming its larger 2019 advance following almost 6 months of sideways investor indecision. A sustained rise above the upper boundary of the indecision area, currently at 46.63, would help confirm this and target an additional 9% rise to 51.50.
EPP has maintained a mostly-stable positive correlation to the S&P 500 (SPX) over the past 15 years.
Chart 1
Table 1 below shows that, considering the aforementioned upside target and a protective stop placed below the 46.16 area, a long entry price of 47.31 would provide a 1:3.6 risk/reward ratio (risking $1.00 to make $3.60) with an initial risk of 2.4%.
Table 1
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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.