Since the days of the Greek financial crisis, investors have frequently wondered which Eurozone shoe would be the next to drop. Italy has often been mentioned as that shoe and that sentiment has become widespread in recent months.
Italian banks’ bad loan problem has “become more pressing during years of economic stagnation. A highly fragmented and inefficient industry doesn’t help — Italy has more than 600 banks, supporting 52 bank branches for every 100,000 adults. Germany has 14 bank branches per 100,000 adults, and the United States 38,” according to CNN Money.
“If the pattern truly is a triangle, then the limit for EWI’s near-term decline is 9.21, corresponding to the fund’s 2012 low. Beneath that level, we would have to assign a different interpretation. Also, beneath that level the decline could accelerate due to stops being hit. On the other hand, there is an attractive Fibonacci support area just above that price floor, near 9.81. June saw that support tested, and we are watching for a possible bounce from there,” adds See It Market.
iShares MSCI Italy Capped ETF