Top Weak-Euro Stock Plays

WINDERMERE, Fla. (Stockpickr) -- The old world economies are becoming relevant again on Wall Street. That's right -- the European debt crisis is slowly creeping back into the minds of market players.

On Tuesday, markets across the globe sold off sharply as borrowing rates for some of Europe's most indebted nations rose to historic levels. The yield on 10-year Irish government bonds rose to 5.98%, which is higher than the price it reached in early May when the Greek debt crisis was front and center. Yields also jumped on Greek and Portuguese bonds as investors decided to sell now and ask questions later.

The renewed fears were sparked by a Wall Street Journal article that said Europe's recent "stress test" of the strength of its biggest banks understated some lenders' holdings of potentially risky government debt.

This news motivated market players to dump any debt tied to the PIIG nations. The euro currency was sold off sharply as investors feared the worst like complete financial chaos for one of these troubled European nations. The euro dropped 1.4% to $1.269 from $1.288 on Tuesday.

As I write this, the euro has managed to rebound back toward $1.274. This rebound was spurred by news out of Ireland today. Ireland's finance ministry said nationalized lender Anglo Irish Bank will be split into a funding bank and an asset recovery bank to wind down its assets.

This news might be helping to cause a relief rally in the euro for now, but the fundamental and technical picture are not pretty and should lead to more downside in the future.

From a technical perspective, the euro is now trading below both the 200-day ($133.59) and 50-day ($128.23) moving averages. Ever since the euro hit its August highs of $133.34, it has never come even close to regaining that level. The most recent high was $128.98. Investors should watch for a break below the nearest support level of $126. A move below that level should open up the floodgates for much more downside. I would use targets of $122 and $119 as the next most likely areas of support.

Here 's a look at a number of stocks that will benefit from a falling euro.

One way to play a falling euro is to simply buy the new reserve currency of the world: gold. The best way to play gold, besides buying the actual futures, is to buy the SPDR Gold Trust ETF (GLD). This ETF is designed to track very closely the actual spot price of gold.