NFTRH+; Europe Play in the Making

NFTRH+ posts are not calls to action; they are ideas for careful consideration to go along with your own research and views.  In this case that goes double, as the Greece/Euro drama plays out well for our projected trade in HEDJ.  But there is no need to jump on it right away; not with herds falling all over themselves to get back out after taking the bullish promotions in the spring.

To review, we did Europe in Q4 2014, when it was appropriate.  We then noted the play was over in the spring.  Since then, we have been on watch for a combination of resumed Euro weakness and corrective European stocks.  The ECB’s QE, if it were to mimic what went on in the US, would seek to boost asset prices at the expense of the currency.  In this case, the prime ‘asset’ candidate is stocks.

So this update is merely an ‘ahead of time’ effort to have us prepared in the event that Europe looks like a good contrarian buy (remember, the original aim was to play QE, and the entirety of the Greek issue could one day be looked back upon as a second buying opportunity).

54 to 56 on the HEDJ (Euro hedged Europe) ETF is roughly equivalent to the 3200 level on the STOXX 50, which is the preferred support area.

hedj

Here is the weekly view of HEDJ and STOXX 50 for reference.

hedj.stox

Have patience (if interested), give it room to breathe and feel like a hunter, in full control of the situation.  That could include aborting the play at any time things do not look right.  We will of course be updating Europe weekly in NFTRH.

Buy Target:  54-56

Sell Target:  Undetermined, but if the trade is undertaken and is successful, the target would be a higher high above 67 several to many months down the road.

Stop Loss:  Below 54 to suit risk tolerance.

A reminder that chart based NFTRH+ updates are just trade setup ideas, which may not be revisited as the parameters are already noted. They are meant as a starting point for further research if interested. Fundamentals-based ideas are also provided for your further research only. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst.