Fairlead Strategies Idea Generator
iShares MSCI Europe Financials ETF (EUFN) & Updates (ADUS, COHR, KBH, PVH)
We recommend closing out existing shorts in: Addus Homecare Corp (ADUS), Coherent Corp. (COHR), and PVH Corp. (PVH) following significant declines.
Separately, note KB Home (KBH) is flirting with its 20-day moving average, but we would wait for two consecutive closes above the stop-loss level before removal.
Weakness in European financials looks set to continue, so today we highlight a short idea in the iShares MSCI Europe Financials ETF (EUFN):
EUFN recently broke down below short-term support, and has a large gap down today taking it beneath the daily cloud. The drawdown has flipped short-term momentum negative, and there are no signs of downside exhaustion yet from the daily DeMARK Indicators®, suggesting the downmove will continue.
Resistance has proven strong above ~$19.50 for EUFN. Downside follow-through is likely after an intermediate-term overbought downturn left resistance intact, with ample room to oversold territory. Also, a weekly MACD “sell” signal supports a retracement below the 200-day (~40 week) moving average and weekly cloud.
Our downside target for EUFN is at the October 2022 low near $13.63 with an intermediate-term time horizon. A generous stop-loss is appropriate in light of recent volatility, and can be placed above resistance near $19.46.
iShares MSCI Europe Financials ETF (EUFN, $17.47)
Target: $13.63
Stop-loss: $19.46