A Dozen ETFs With Exposure to Europe Start the Week Oversold
European inflation came in lower than expected on Friday triggering a selloff in the Euro and European stock markets. Traders are concerned that low inflation threatens the fragile economic recovery. In the past, European Central Bank President Mario Draghi has promised to do whatever is necessary to defend the Euro. Traders will be watching closely as the ECB meets on Thursday and with markets oversold, easing could be bullish for the stock markets of Europe.
At the PowerRatings web site, traders can create portfolios to spot trends in the market. Shown below is a portfolio of ETFs with exposure to Europe or individual markets within the Euro zone. These ETFs will start trading on Monday oversold. PowerRatings will update throughout the day and traders can easily spot increased weakness that offers a buying opportunity.
PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter trades on stocks with a PowerRatings of 8 or higher with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.
In the past, buying stocks with a rating of 10 on a 3% pullback the next day and selling five days later has been profitable 75% of the time. The average winner has gained 5.9%. Other entries and exits also show high winning percentages and large average gains.
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All data is as of the end of day on 1/31/2014.