DXJ Wisdom Tree Japan Hedged ETF – Ascending Triangle Upside Breakout

by Olivier on November 6, 2014

The Nikkei is breaking out to the upside. The obvious problem with investments in Japan is its rapidly depreciating currency. There is no other way to put it: the Yen is getting crushed. So instead of buying ETFs like EWJ or JPNL the better alternative is reducing risk by going long currency hedged ETFs like DXJ or DXJS.

As outlined in my chart annotations DXJ – Wisdom Tree Japan Hedged ETF broke former long-term resistance. It is currently testing it from the upside. If the retest is successful this will be

‘former resistance turning into support’.

A rather simple but effective technical analysis concept. We are not there yet, that’s why I am only building an initial position. If price confirms my assumptions I will add more long exposure. It goes without saying price is retesting a price area not a specific price, therefore allowing for some wiggle room is paramount.

Click on DXJ chart to enlarge:

Emerging rallies are often spearheaded by a change in leadership. – Martin Pring

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