Playing the Setup in iShares MSCI EAFE

Published on Friday, 24 August 2012 08:28 Written by TradersHuddle Wire

New York, August 24th (TradersHuddle.com) - iShares MSCI EAFE Index Fund (NYSE:EFA) closed the trading day at $52.18, near its 50 day and 200 day moving averages currently set at $50.03 and $51.21 respectively. iShares MSCI EAFE's price action placed the stock above these important levels, which could translate into a trading opportunity.

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.

Although, the price is above important moving averages, it's important to highlight that this is not a prime setup for buying the dip strategy, as the 50 day moving average is currently below the 200 day moving average.

The peaks and troughs algorithm shows calculated support at $47.29 and resistance at $52.05. These levels should also be evaluated by traders when planning their next move, as they provide an insight into the latest price action.

If traders want to establish a long position in iShares MSCI EAFE, it will certainly be better to wait, given that the stock is technically broken with the 50 day moving average trading below the 200 day moving average. Traders can also look at the current range defined by the peaks and troughs to establish a short trade versus those levels.