Strength From Above, Below And Overseas - Canada, Japan, China to Name a Few

Includes: CEF, CHN, EPP, EWC, EWJ, TM
by: Tate Dwinnell

Last week I took at a look at areas of weakness in the market such as healthcare, REITs & Utilities, but there really is always a bull somewhere (even more so today with opportunities for US investors to reap rewards from the efforts of other countries). In fact, most of the best opportunities for investment continue to be in markets other than US. That is certainly illustrated in the charts of the ETFs. I don’t have time to look at all the bullish charts in this post but wanted to share a few that I think are interesting right now.

With a focus on mining, Canada (Australia and South Africa too) continues to be a source of strength. Two funds that I track, Central Canada Fund (NYSEMKT:CEF) & the Ishares Canada fund (NYSEARCA:EWC) continue to move to new highs. CEF is concentrated in gold and silver plays while EWC is a bit more diversified and includes some financial names in addition to the mining companies.

CEF is one of the high flyers of the ETF world and recently broke out from a bullish triangle formation with good volume. If you missed the initial breakout, it may come in some and offer a better price point. Buying up here is asking for trouble:

When you think of Canada, you think of Materials and Energy plays, but EWC is a well diversified ETF with materials and energy making up 45% of the fund, banks 20% and insurance 10%. According to ETF Connect , the Royal Bank of Canada is the largest holding at around 6.5% of the fund. Technically, the chart of the fund looks great here, having recently broken out and consolidating quietly.

The Asia Pacific region is providing some interesting opportunities through the Ishares Pacific (ex Japan) (NYSEARCA:EPP) , Ishares Japan (NYSEARCA:EWJ) and the China Fund (NYSE:CHN) funds.

While EPP is heavily weighted towards financials (nearly 50%), the top holding is the large Australian miner BHP Billiton (NYSE:BHP) which represents around 7.5% of the fund. The stock has been surging and recently broke out to a new all time high.

It should be noted that the top holding of the Ishares Japan fund is Toyota Motor (NYSE:TM), an ADR trading on the NYSE (represents around 5.5% of the fund). If you like a little more risk in exchange for more reward, this is a stock that broke out recently from a nice looking consolidation.

Many other countries look outstanding, however many are overextended. Brazil (BZF, EWZ) and India (IFN, IIF) continue to look strong despite big run ups. I’ll cover these opportunities in greater detail in a future post. Too many charts, too little time. Until next time…