The bulls finally returned to Wall Street after a prolonged stretch of profit taking throughout the week. Good news from all around the globe bolstered major equity indexes into bright green territory for the day; overseas, Spain unveiled a detailed austerity plan focused on massive spending cuts. At home, investors cheered on the latest employment report; weekly jobless claims were better-than-expected, with the figure coming in at 359,000 versus the anticipated 375,000 [see also Free Report: Seven Simple & Cheap All-ETF Model Portfolios].
This Canadian dollar ETF has staged an impressive bull-run since shares bottomed out around the $96 level in late June of this year. Since then, FXC has charged higher, moving within a fairly well-defined upward sloping price channel (blue lines). Aside from piercing right above its 200-day moving average (yellow line), FXC has also managed to summit historical resistance; notice how this ETF recently settled above $101 a share (red line), which recently served as a major resistance level on 3/1 and 4/27/2012 [see also ETF Technical Trading FAQ].
Short-term traders may consider jumping in long at current levels seeing as how FXC is floating right around the bottom-half of its price channel; this entry point presents an opportunity to set a tight stop-loss in case selling pressures continue, while also favorably positioning yourself before the uptrend resumes [see also 3 ETF Trading Tips You Are Missing].Outlook
If the latest Canada GDP report come in better-than-expected, the loonie may have the wind at its back for the day; in terms of upside, the next resistance level for FXC comes in at $103 a share. On the other hand, less-than-stellar economic growth may paint a worrisome picture for the nation’s currency and equity market; in terms of downside, this ETF has immediate support at $101 a share followed by the $100 level. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques.
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Disclosure: No positions at time of writing.