Trading Idea - Is iShares MSCI Australia Index close to Resistance?

Published on Tuesday, 07 February 2012 08:56 Written by TradersHuddle Wire

New York, February 7th (TradersHuddle.com) - Shares of iShares MSCI Australia Index Fund (NYSE:EWA) are trading very close to calculated resistance at $24.06 with the current price action closing at just $23.87 placing the stock near levels that make it difficult to buy.

iShares MSCI Australia Index Fund (NYSE:EWA) seeks to provide investment results that correspond to the price and yield performance of equities traded publicly in the Australian market, as measured by the MSCI Australia Index. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. The Index seeks to measure the performance of the Canadian equity market. The Index is a capitalization-weighted index that aims to capture 85% of the total market capitalization.

iShares MSCI Australia Index's current stock range is defined by current calculated support defined at $21.21 and by the resistance level at $24.06, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for iShares MSCI Australia Index, as the stock is well above support, however, as the stock pulls back towards $21.21 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $24.06 then traders will get an opportunity to enter iShares MSCI Australia Index stock by establishing a position as the stock moves to a higher range.