iShares MSCI South Korea Capped ETF (EWY) is an exchanged traded fund seeking to track the performance and yield of the MSCI Korea 25/50 Index. EWY is currently trading around $65.50 in a 52 week range of $49.57-$65.57. EWY is higher on the year but has underperformed the broader market only adding 3.4% to its share price year to date. Earlier this week we saw some very bullish order flows in EWY. On Wednesday a trader bought 20,000 EWY Nov 66 calls for $0.79 with stock at $64.76. EWY has rallied on the back of this very bullish trade. EWY is also trading in bullish territory according to the Ichimoku Cloud. The cloud is upward sloping and shares are trading well above all major support levels. We believe that the technical strength in EWY confirms the signal given by the unusual option activity we saw in EWY. We will look at a long stock swing trade in EWY.
Trade: Buying EWY shares at $65.55 with a stop at $63.55
Risk: $2.00 per share
Target #1: $66.55
Target #2: $67.55
Target #3: $69.55
