The bull parade continues on Wall Street in the face of intensifying worries over when the next downturn will finally come around. The S&P 500 Index posted another five-year high as the benchmark settled just above 1,490, inching closer and closer to the psychologically significant 1,500 level. On the ETF front, the well-known SPY turned 20 years old yesterday, and what better way to celebrate than with a handsome gain on the day [see Visual History Of The S&P 500].
After kicking off 2013 on a positive note and grinding along the $29 level for the last week, EWC appears to be gearing up for a breakout to the upside judging by its bullish price action over the last two trading sessions. Notice how above-average buying volumes bolstered this ETF higher on January 18, 2013, perhaps suggesting that new buyers are stepping in around the $29 level, which would imply that EWC should have enough momentum to break above its historic resistance (red line) around $29.50 a share [see How To Swing Trade ETFs].
Entering into any sort of position at current levels, whether long or short, is not recommended for conservative investors given EWC’s proximity to a major resistance level [see ETF Technical Trading FAQ].Outlook
If the latest economic outlook issued by the Bank of Canada strikes an optimistic tone, EWC may have the much-needed catalyst to charge higher; in terms of upside, this ETF has major resistance around $29.50 a share. On the other hand, pessimistic or over-cautious commentary may open the doors to profit-taking pressures; in terms of downside, EWC has support at $28.50 a share followed by the $27 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.