6 Country ETFs With Upside Potential

May 15, 2023No Comments

Country ETFs With Upside Potential

Today we are going to talk about some country stocks and in fact, country ETFs, and these ETFs represent the indices of the respective countries that we are going to be talking about. I’ve highlighted six country ETFs that might be of interest to you. They certainly are of interest to me and ValueTrend, four of which have signaled outright buy signals and two of which are on the cusp and definitely should be looked at and watched until we do get an outright buy signal. So it’s kind of exciting to see things that are actually looking like they’re potential buys and potential opportunities, especially at this point in the market. I just finished publishing my newest Bear-O-Meter report and that Bear-O-Meter report basically came outright bearish as far as the North American indexes go.

iShares MSCI Sweden ETF

So this will be highlighting some opportunistic places that I think we should all be looking at and aware of. Now what I want you to notice here is this is the first of our buy candidates and it’s Sweden. These are all country ETFs. So, this is the iShares Sweden ETF and what you’ll notice is that there is a beautifully defined head and shoulders. You can see the neckline. It’s as crisp and clean as you can get, and where the neckline came into the left shoulder, it’s just now starting to break that neckline. It looks like right now it’s starting to test that neckline.

COUNTRY ETFS WITH UPSIDE POTENTIAL - iShares Sweden ETF

As you probably are aware, the markets have been a little jittery since the beginning of May. So maybe we get some pullback on most of the indices, but my belief is that you’ll get a bigger pullback on the North American indices versus some of these country stocks. So long as the neckline does not break, and that lies somewhere around $35.50 to $36 level, if that doesn’t break by more than a few days then I’m thinking this is probably an opportunistic place. So is a very interesting ETF to keep your eyes on.

iShares MSCI Germany ETF

Let’s go to the next one, which is the Germany ETF. Again, we have a pretty nice neckline and you can see that going way back to the beginning of 2022, we see a breakout and the breakout looks legit. It’s not even testing right now, it’s actually breaking out and staying above that neckline.

COUNTRY ETFS WITH UPSIDE POTENTIAL - iShares German ETF

Of course, whenever we look at these charts, as with the Swedish chart we just looked at, you can see that old high levels will probably be their targets. So again, decent potential. It’s trading at around $29 right now, potential is for close to $34, which is around 15%. The Swedish chart had even more upside from what I could see. You might get a bit of a pullback to the neckline here if the world indices pull back the way I think they might over the next couple weeks. But whatever the case, this is a very positive looking chart.

iShares MSCI Japan ETF

Now, here’s one that’s in the wait and see category, but still it’s setting up beautifully. And if you read one of my blogs a while ago, I presented a blog showing the Aroon index. It’s an oscillator and what it does is it compares highs to lows over periods of time. So it’s an oscillator that works on time and you can read my explanation on the blog, just do a search and do it under Aroon, which is spelled A-r-o-o-n. Basically, I talked about Japan as being one of the world indices that are actually showing positive Aroon and most indices out there are negative Aroon, which is another indicator that the North American indexes, for example, will probably fall, but the Japanese index does not look so bad. You can see it is testing this point of resistance that’s been in place since earlier this year. If it breaks out, this could be very positive because look, you’ve got old support in the mid-sixties and old resistance in the high sixties from the current price of around $58. That’s plenty of upside. Between 10 and 20% basically. So, let’s watch Japan.

iShares MSCI Netherlands ETF

So next chart is the Netherlands, and you can see same idea. This is a watch, not an outright buy at this point, but look at that perfect neckline. Just exactly at around $43 you’ve got this point of resistance and if that breaks out, look at how much upside you have. You’ll see something like, say you bought it at $44 or at above, you’ve got pushing $10 upside, which is pretty significant. Well over 20% upside. Again, I’m of the discipline that I like to see a breakout and I like that breakout to last before I buy, but very interesting. Of course, you place your stops below the neckline breakout just in case it fails. Guess what? Things don’t always work out the way we hope. That’s trading. So you can see failures of these breakouts and if they fail, you’ve got to get out.

iShares MSCI France ETF

Simple as that. No such thing as buy and hold in my world anyways. Next thing, France. France has been on a tear, surprising with all the riots and everything that’s going on over there, but there’s the old highs back in 2021. This is one of the few world indices that are at new highs. The S&P 500 and the TSX the NASDAQ, the European indexes, they’re not at new highs for the most part, but France is. So again, that’s a very, very good sign that the move is likely to continue. It might pull back to the neckline which would be this old resistance point, but I think there’s a good story to be seen in France.

iShares MSCI India 50 ETF

So, here’s an interesting chart. It’s a little different than the ones we’ve been looking at. So rather than seeing all-time highs like the France ETF or neckline breakouts that we’re either witnessing, like the Netherlands or Sweden, or necklines that are being tested, I think actually Netherlands was one being tested like Japan, we have a declining trend here, but that declining trend seems to be breaking. As you can see, if you were to draw a trend line and I didn’t do it for you, but you can draw that trend line and you can see it breaking out. You can also see that the lows here have been getting higher or at least flat over the past couple of lows. So this is a positive indicator because when you see the breakout on the India 50 ETF and you see at least level lows, like no more lower lows, that is a very, very positive indicator. So I’m very intrigued with this ETF.

Final Thoughts

Now I should note, I don’t own any of the ETFs we’re discussing today. These are just country ETFs that I’m giving you ahead of time input on before I even buy them. These are things that I’m looking at as potential buy candidates and I think they’re all interesting, the ones that I’m showing you today. So, we’re back to Sweden and as you can see there’s the breakout and how much upside that has. But I wanted to just share these six country ETFs and just let you know that just because the North American markets are really having a hard time, if you look at the S&P 500, it just can’t break 4200. But there’s other indices out there that offer, in my opinion, real opportunity and something that we should all be at least considering for our portfolios because there’s a lot of stuff out there that is not connected to the movement of the S&P 500. We’ve become so fixated on US markets in particular and North American markets in general just because we live here and also because that’s where the action’s been, especially on the US market, that we’ve lost sight of the fact that there’s other markets and we should be looking at them. So I do hope this is inspiring for you to do some research on your own in these six indices as well as some of the others out there because it’s a big wide world folks, and there’s lots to see.

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