EWY psar bull signal

The exchange-traded fund that tracks Korean stocks, EWY, is displaying a psar bull signal today on a decline from Wednesday's rather narrow trading range.

The pps gave a bull signal on Tuesday, and the macd has been in bull mode since Feb. 16. The sto is approaching overbought territory, and the mfi is cruising through the neutral zone.

All of which tells me this issue is most likely prone to whipsaws.

The price since late January can be bounded, with a few outliers, between $47.75 and $43.50, and with more exceptions, back to September 2009. This is a long-running sideways trend.

You are here:

• Resistance
• $50.54, 6.9%
• $47.72, 1.9%
• Now $46.83
• Support
• $45.27, -3.3%
• $44.54, -4.9%
• $43.15, -7.9%

There's some room on the upside if EWY can break through resistance at $47.72, nearly 7% potential above the current price.

For sidewinder like this, I would tend to play it as an iron condor, perhaps $48 to $45 for the region of maximum profit at expiry.

It's a bit early in the April cycle to play iron condors, by my rules. So this is not a trade for me.

With a bit of imagination, by the way, EWY can be seen as an ascending triangle, a bullish construction, beginning Feb. 5 at $43.15, with reversals at $47.72 and $47.65 on the upside, and a downside touch at $44.54.

Taking $47.70 as the top level and $4.55 as the widest point, then breakout at the end of the triangle would, in theory, bump the price up to $52.25, a gain of 9.5% from the triangle top.

Not too shabby, if it were to play out that way. (Although I sometimes find that triangles are in the eye of the beholder.)

Abbreviations:
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic