Mexico Ready to Break Down the Wall

President Trump has been talking about building a wall between the US and Mexico for over a year. As time has moved on in his young presidency that talk has slowed. But the Mexican’s have not stopped thinking about it. In fact the Mexican stock market has been plodding higher and is now at its own wall, ready for a break out.

The chart below shows the Mexican ETF ($EWW) over the last 3 years on a weekly basis. After falling from a top in the summer of 2014 is started to slow the slide in late 2015. Since November 2015 it has dried up to a trickle lower against falling trend resistance. It made a lower low after the November elections, but is now back at that resistance. Will it break down the wall and push higher?

Momentum indicators offer a bit of a mixed story. The RSI is at 2 and 1/2 year highs, but in the short term it is testing a move back lower. The MACD is also at highs, but leveling, showing a waning of momentum. The price also is stall far below the 200 week SMA. It is above the 200 day SMA (40 week) though, a bullish indicator.

The wall has come into play in a different way in Mexico now. A break above it could easily see a 10-15% move to the upside. But rejection at the wall would suggest a continued trickle lower and a new low 15% below. Keep an eye on the wall.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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