Wednesday, June 5, 2013

Buongiorno!  As much of Europe looks like Venice we see the iShares MSCI Italy Index Fund (EWI) in 10th place, its highest position since last summer and running through the ranks like a Ferrari.  Occupying  deep waters just a couple of weeks ago, the fund has achieved a 70.4 Quant Score today jumping more than 15 points in 10 days thanks to its 80.9 Behavioral Score.  A move like that is usually attributable to a spike in option activity and while its put/call score is very elevated at 95.8, so are its other sentiment indicators.  The technical score on this prima donna has caught our eye though as it has improved from 24.4 last month to today’s 71.1.

You don’t have to know about Fibonacci to appreciate EWI’s chart.  Matching its 2009 low below $10 per share last summer, the fund moved up to almost $15 in January then gave back about 60% of that move to early April’s low of 11.59.  Getting back up to yesterday’s close of 13.46 has boosted its short and intermediate term technical scores into the 70s and its long term score up to a decent 65.8.  Its current price is now above what bears could have seen as a left shoulder from last September.  Quant’s technical scores are its most complex algorithms calculating several different relative strength and momentum indicators in each time frame.  The strength in January also saw good technical scores that turned down quickly in early February as the fund began its 20% correction.  Rallying almost 18% from the April low still leaves plenty of room to run to that January high which is still less than half of its $36 all time high at 2007’s double top.

EWI’s 26 holdings have three quarters of AUM concentrated in financials, industrials and energy companies that combine to give it a respectable 63.2 Fundamental Score contributing to its 8.66 Green Diamond Reward Rating.  It’s 4.18 Red Diamond Risk Rating is higher than most top rankers that average below 4 again but is lower than today’s all equity ETF average of 4.53.  As you paint your masterpiece portfolios, let Quant be your Gondolier through the overly liquefied world markets and consider EWI as a tasty espresso on this lovely primavera day that would inspire Botticelli. Grazie e arrivederci.

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