Potential breakout entry in (EZA)


For the third consecutive day, stocks closed mixed with little to show from the day’s activity. All five major indices spent the session handcuffed in the four day trading range. The Dow and the S&P 500 appeared to be heading for new territory, but both were met with high volume selling into the close. The Dow Jones Industrial Average and the S&P 500 posted gains of 0.2% and 0.1% respectively. Technology stocks did not fare as well. Both the Nasdaq and the S&P MidCap 400 slid 0.2%, while the small-cap Russell 2000 finished down by 0.3%. Overall, the market maintained its sluggish holiday pace.

Market internals also ended the day mixed. Turnover was up on Tuesday, with much of the action occurring during the first hour and last hour of the session. Turnover rose by 16% on the NYSE and 3% on the Nasdaq. Despite the increase, total volume ended the day well below the 50-day volume moving average on both indices. Advancing volume outpaced declining volume on the NYSE, while the opposite occurred on the Nasdaq. The advancing volume to declining volume ratio on the NYSE ended the session at a plus 1.2 to 1. However, the ratio on the Nasdaq was 1.2 to 1 in favor of declining volume.

In Tuesday’s newsletter we discussed the iShares MSCI Chile Investable Market Index ETF (ECH). We stated, “The setup we are looking for is an undercut of support at the 50-day MA followed by a quick reversal back above this key mark”. During yesterday’s session, ECH did in fact undercut the 50-day MA on a spike in volume. Further, it closed below this moving average. For ECH to present a possible long entry, it must now reverse and rally back above the 50-day MA. Ideally, we would like to see a “gap-up reversal” in the next two to four trading days. This type of price action would likely signal further upside for this ETF.

The iShares MSCI Hong Kong Index ETF (EWH), is precariously clinging to an eight day support level just below its 20-day EMA and 50-day MA. A drop below the December 16th Low of $18.66 could present a shorting opportunity for this ETF. Although EWH is not yet being placed on the watchlist, we are monitoring it carefully for an entry. For our subscribing members, an intraday alert will be sent should we decide to enter this trade.

The iShares MSCI South Africa Index ETF (EZA), is attempting to break above key resistance at $73.00. This is the third time in the past two months that EZA is testing this mark. A volume fueled move above yesterday’s high of $73.28 provides a possible buy trigger for this ETF. A strong increase in volume is likely the key to this setup.

The broad market continues to exhibit indecision. Recent ETF scans have provided fewer quality long setups. The lack of volume and overall weak market internals suggest through the end of the year.

Today’s Watchlist:

There are no new official setups for today. As always, we will send an Intraday Alert if any new trades are made.

Daily Performance Report:

Below is an overview of all open positions, as well as a performance report on all positions that were closed only since the previous day’s newsletter. Net P/L figures are based on the $50,000 Wagner Daily model account size. Changes to open positions since the previous report are listed in red text below. Please review the Wagner Daily Subscriber Guide for important, automatic rules on trigger and stop prices

    position summary

    Having trouble seeing the position summary graphic above?
    Click here to view it directly on your Internet browser instead.


  • Per intraday alert, the official stop price in YCS is now 15.86 (10 cents below the opening 20-minute low).

  • Reminder to subscribers – Intraday Trade Alerts to your e-mail and/or mobile phone are normally only sent to indicate a CHANGE to the pre-market plan that is detailed in each morning’s Wagner Daily. We sometimes send a courtesy alert just to confirm action that was already detailed in the pre-market newsletter, but this is not always the case. If no alert is received to the contrary, one should always assume we’re honoring all stops and trigger prices listed in each morning’s Wagner Daily. But whenever CHANGES to the pre-market stops or trigger prices are necessary, alerts are sent on an AS-NEEDED basis. Just a reminder of the purpose of Intraday Trade Alerts.

  • For those of you whose ISPs occasionally deliver your e-mail with a delay, make sure you’re signed up to receive our free text message alerts sent to your mobile phone. This provides a great way to have redundancy on all Intraday Trade Alerts. Send your request to [email protected] if not already set up for this value-added feature we provide to subscribers.

    Have you had your free 1-month trial to Morpheus Trading Group’s additional ETF and stock trading newsletters?

      Edited by Deron Wagner,
      MTG Founder and
      Head Trader