Sell Ratings on Three Different European-Related ETFs Signals Potential Trouble Ahead
European markets have been rallying nicely over the last few months with a number of countries seeing sharp rallies off their October lows. Unfortunately the rallies have put a number of Exchange Traded Funds (ETFs) in overbought territory on both their weekly and daily charts.
Three ETFs saw their daily stochastic indicators make bearish crossovers on December 31—the iShares MSCI Germany ETF (EWG), the iShares MSCI United Kingdom ETF (EWU), and the SPDR Euro Stoxx 50 ETF (FEX). Those same three ETFs all have “sell” ratings on the Tickeron Scorecard currently as well.
The EWU saw a recent surge when it was announced that there was a Brexit deal in place for England to leave the European Union. The unknown status had been hanging over the head of the British market for quite a while, so the idea that a last minute deal was reached was a relief for investors. Unfortunately it could mark a high point over the short term.
Looking at the FA screener, the EWU and the EWG both have one negative indicator and zero positive ones. The FEZ has one positive indicator and zero negative ones. Because these are ETFs, there are only a few fundamental indicators available. For the EWU the lone bearish signal is from its Outlook Rating and for the EWG it’s the Seasonality Score that is negative. The FEZ gets a positive reading from its Outlook Rating.
On the technical side, all the same indicators are available that we see with individual stocks. The EWG has three bullish signals on the technical side and two bearish signals. The FEZ and the EWU both have four bearish signals and two bullish signals from the technical indicators. There are two areas where all three receive bearish signals—the MACD indicator and the Bollinger Bands. Both the FEZ and the EWU receive bearish signals from their RSI indicators and the Momentum Indicators. All three funds were in overbought territory based on the daily stochastic indicators, but the EWU exited overbought territory on January 4.
Another item of concern for these three ETFs is their current sentiment, specifically the short interest ratios. All three have very low ratios at this time. In fact, the FEZ’s ratio is at 0.60 and that is the highest of the three. What this suggests is that investors are pretty bullish at this time and that could be a concern if we see bulls exiting their positions.
The comparison feature for Tickeron shows how these three ETFs stack up against one another and how they compare to other funds.
EWG sees MACD Histogram crosses below signal line
EWG saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on October 15, 2025. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 48 instances where the indicator turned negative. In of the 48 cases the stock moved lower in the days that followed. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 15, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on EWG as a result. In of 80 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
EWG moved below its 50-day moving average on October 10, 2025 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where EWG declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
EWG broke above its upper Bollinger Band on October 01, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for EWG entered a downward trend on October 01, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
The 10-day moving average for EWG crossed bullishly above the 50-day moving average on October 07, 2025. This indicates that the trend has shifted higher and could be considered a buy signal. In of 19 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where EWG advanced for three days, in of 336 cases, the price rose further within the following month. The odds of a continued upward trend are .
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