The Netherlands and Sweden have been among the most consistently strong representatives in the NDW Country Index Matrix ranking and stand poised to break out of near-term trading ranges.
There has been a significant amount of movement in certain foreign equity markets over the past month, however, the relative strength picture shown through our NDW Country Index Matrix ranking has remained largely unchanged, with no changes to the constituents of each quartile in July. The past week did see the Netherlands move back into the top-ranked position out of the 43 countries examined, with that country having maintained a rank of third or higher since November of last year. In fact, both the Netherlands and Sweden have been among the most consistent representatives in the country index matrix rankings, with the Netherlands remaining in the top quartile since December 2019 and Sweden staying in the top quartile since May 2020.
The technical pictures of fund representatives for both the Netherlands and Sweden also reveal similar movements over the past few months. The iShares MSCI Netherlands ETF EWN has moved largely sideways between $47 and $50 since April after giving nine consecutive buy signals since early 2020. The fund most recently reversed higher after finding support for the third time at $47 to break a double top at $49.50 in late July, matching its all-time high from June. EWN has maintained a favorable fund score with a recent posting of 5.54, which bests the average non-US equity fund (3.12) as well as the average European equity fund (3.52). Weekly momentum also recently flipped positive, suggesting the potential for further upside from here.
The iShares MSCI Sweden ETF EWD has also moved largely sideways since April, reaching a high of $49 in June before moving lower later that month to $45.50. The fund has pushed higher over the past few weeks to break a double top at $48 before pushing higher this week to match its all-time high of $49. Despite the near-term improvement, EWD is in actionable territory with an intraday weekly OBOS reading of 38% Wednesday. The fund possesses a favorable 4.44 recent fund score posting and has also shown a recent flip to positive weekly momentum, suggesting the potential for further upside.
Both of these funds have been among the strongest relative strength countries in international equities for over a year, showed a period of consolidation, and have now shown a recent attempt at breaking out of their respective trading ranges. Those looking to add exposure to developed market equities may look toward either representative at current levels or upon potential movement to new all-time highs.
