SchalkLouw

Are we heading for a repeat of last year December?

Short
NASDAQ:ACWI   iShares MSCI ACWI Index Fund
Interesting graph on the MSC I All Country World Index ETF ( ACWI ). Since March this year, the ACWI traded in a parallel band between $70-$75 for most of the period. Three times during this 7-month period, it tried to breach the resistance, just to see it drop back to the $70 support line again.

It is also important to note that the share price has been trading above both the 50- and 200-day moving averages for most of the time since March, with both the moving averages still looking very bullish .

The share price however breached the resistance level again on 25 October 2019, which saw the share price gaining some proper momentum since then.

For the first time since 23 April, we find the share price back in EXTREME overbought environment (above 70), which was followed by the 1st retracement in May. We can also clearly see how the share price started losing momentum since last week, which if like the previous 3 cycles, could place the share price under pressure soon.

Should we see a pull-back from current levels, could use the previous top ($75) as support level . If I was a short-term trader and I had a long position in the ETF , this will act as my stop-loss, as a break a close below these levels would put as slap-bang in the parallel band. This will bring the 50-day moving average (at $74.51) back into play, with a break and close below this level only seeking support at the 200-day moving average ($72.90). This is currently my first target on the ACWI .

A break a close below this level will most probably try and test $71.65, which if unsuccessful, will bring my 2nd target into play ($70). Only at these levels, I will look at possibly buying again.

For investors who currently got a serious case of FOMO, could consider AMEX:ACWV as a possible alternative to ACWI .

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