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.
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where EWG declined for three days, in of 243 cases, the price declined further within the following month. The odds of a continued downward trend are .
The 10-day RSI Indicator for EWG moved out of overbought territory on May 29, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 36 similar instances where the indicator moved out of overbought territory. In of the 36 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on June 13, 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 .
The Moving Average Convergence Divergence Histogram (MACD) for EWG turned negative on May 29, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at .
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 2 days, which means it's wise to expect a price bounce in the near future.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where EWG advanced for three days, in of 338 cases, the price rose further within the following month. The odds of a continued upward trend are .
EWG may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 284 cases where EWG Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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