iShares MSCI EAFE Is Dipping Below Support

Published on Tuesday, 26 June 2012 08:28 Written by TradersHuddle Wire

New York, June 26th (TradersHuddle.com) - Shares of iShares MSCI EAFE Index Fund (NYSE:EFA) closed the trading session at $47.36 below calculated support at $47.99. The stock broke long setups, prompting the bulls to worry that this move might give the bears the upper hand.

iShares MSCI EAFE Index Fund (NYSE:EFA) is an ETF with the investment objective to seek investment results that correspond to the price and yield performance of equities traded in the Australasia, European and Far Eastern markets, as measured by the MSCI EAFE Index. The underlying index measures international equity performance. It includes 21 MSCI country indices, representing the developed markets outside of North America, including Europe, Australasia and the Far East.

iShares MSCI EAFE's stock was trading in a well defined range with support at $47.99 and resistance at $50.83; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.

From a technical perspective, it can be expected that previous support becomes resistance, as the new range gets defined. However, $47.99 will remain in focus as iShares MSCI EAFE's price action places the stock near the broken support. Traders will be waiting to see if it can bounce back and return to its previous range.

Traders wanting to establish a short position in iShares MSCI EAFE can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $47.99. However, if traders want to build a long position, the best entry point to do so is when the price action takes the stock back to calculated support.