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Israel ETFs Breakout


To start 2014, some of last year’s top-performing developed markets are stumbling. Perhaps it is telling that the Global X FTSE Portugal 20 ETF (PGAL) is the best developed markets ETF and the iShares MSCI Italy Capped ETF (EWI) is the leader among those funds tracking G7 nations.

There are other noteworthy developed market ETF opportunities, including with the two Israel ETFs, the iShares MSCI Israel Capped ETF (EIS) and the Market Vectors Israel ETF (ISRA) . [A Slow Start to 2014 for Some Old DM Gems]

EIS “broke out from a tight, five-week base above a rising 50-day moving average,” said Deron Wagner of Morpheus Trading Group. “We are looking for a three to five bar pullback as the entry. The target is around the $54 – $55 area, where there is resistance on a weekly chart.”

EIS, the older of the two Israel ETFs, closed around $49.50 Thursday and is just 0.7% below its 52-week high. The fund has not traded above $50 since mid-2011 and has not closed above $55 since early 2011. EIS is up 4.6% over the past month, but that lags the 5.9% gained by ISRA over the same time.

ISRA recently cleared resistance at $30 and, in another bullish sign, its 20-, 50- and 200-day moving averages are all rising. The newer of the two Israel ETFs closed just below $31 Thursday and enters Friday’s session 11.6% above its 200-day line.

EIS is the member of the duo focused more heavily on familiar, blue chip Israeli stocks such as Teva Pharmaceuticals (TEVA).

On the other hand, ISRA could be seen as the play on a new Israel with its almost 31% weight to the technology sector.  ISRA is far more levered to the Israeli startup boom with a 31.5% weight to tech stocks. ISRA is also home to nearly 30 more holdings than EIS, giving the new Israel a broader cap reach, which could be seen as a sign that if a spate of Israeli IPOs come to market, some could eventually find a home in ISRA. [Israel's Startup Scene Could Boost This ETF]

Market Vectors Israel ETF

ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.