EWJ’s moving averages
On November 13, 2015, 76% of the portfolio holdings of the iShares MSCI Japan ETF (EWJ) closed above their 100-day moving averages as compared to 67% on November 12. 88% of EWJ’s holdings closed above their 50-day moving averages on November 13. 58% of EWJ’s holdings closed above their 20-day moving averages as compared to 53% on November 12.
This rising trend indicates that in the short term, most of EWJ’s equity holdings are moving on an upward trend in the current scenario by making their moving averages a strong support point. A support point is the level where more buyers are available than sellers, and the buyers will not let the price go down.
The graph above shows the percentage of EWJ’s portfolio holdings that were above their 100-day, 50-day, and 20-day moving averages. It also shows a relative strength index analysis.
On November 13, 2015, 89% of EWJ’s portfolio holdings were in the 30–70 relative strength index (or RSI) range as compared to 86% on November 12. 7% of the ETF’s holdings had RSIs of above 70. This is known as the overbought zone.
4% of the ETF’s holdings had RSIs of below 30. This is known as the oversold zone. Most of EWJ’s holdings are in the 30–70 RSI range. A very small percentage of the portfolio is in the overbought and oversold zones.
Stocks with high weight in the ETF include Toyota Motor (TM), Sony (SNE), Honda Motor Company (HMC), SoftBank Group (SFTBY), and Sumitomo Mitsui Financial Group (SMFG). These stocks returned -0.83%, -2.6%, -0.62%, -2.1%, and 0.01%, respectively, on November 13, 2015.
You may be interested to read How the EWJ ETF Provided Positive Returns in October.