Germany has been called the "economic engine" of Europe and clearly the iShares MSCI Germany Index Fund (ETF) (EWG - Get Report) has outperformed the rest of the European country funds over the past year. The performance chart illustrates the point and includes the following funds: iShares MSCI Germany Index Fund (ETF) EWG, iShares MSCI Italy Index (ETF) (EWI - Get Report) , iShares MSCI Spain Capped (ETF) (EWP - Get Report) , iShares MSCI France Index (ETF) (EWQ - Get Report) , and the S&P 500 Index, and shows their individual performance levels over the past 52 weeks.

 

The EWG is just behind the S&P 500 in performance in that time, but the European laggards have been picking up their recovery pace and breaking through technical resistance levels. Here are charts of the Germany fund and the country funds to watch for outperformance over the intermediate term.

 

The iShares MSCI Germany Index Fund (ETF) EWG has experienced wide price swings from its 2014 high to its 2016 low, and it dramatically underperformed the S&P 500 index over this period. Over the past year as shown in the performance chart, however, it has caught up and managed to recover more than 62% of the decline. The fund has been making higher highs and higher lows over the last year which have taken it back above its 40 week moving average and through a long term downtrend line drawn off the 2014 and 2015 highs. Moving average is tracking higher and above its centerline and the accumulation distribution line is well above its signal average. The fund closed the last week near its highs and is in a clear uptrend.

 

 The iShares MSCI France Index (ETF) EWQ broke above the 50% retracement level of its previous two year decline, and moved back last month to successfully retest it before continuing higher. It also had a strong week and closed near its high and just above the 62% Fibonacci retracement level of its 2014 to 2016 range. The vortex indicator, which is designed to identify early shifts in trend, has made a bullish green-over-red line crossover and the accumulation distribution line is trending above its rising signal average. The fund looks like it made a long-term triple bottom in early last year and is on track to continue higher.

 

The iShares MSCI Italy Index (ETF) EWI has lagged both the Germany and France funds only retracing 38% of its 2014 to 2016 decline. It is currently sitting below its long-term downtrend line, but is back above its 40 week moving average and finished the week strong. The relative strength index reflects the positive momentum off last November's low and Chaikin money flow suggests the fund is under institutional accumulation. It would be expected to continue higher and break above the downtrend line and the resistance level and begin to make up ground on the Germany and France funds.

 

 The iShares MSCI Spain Capped (ETF) EWP has not yet retested its 38% retracement level but has broken above the declining neckline of an inverse head and shoulders basing pattern. Moving average convergence/divergence has been rising for a year and is now above its center line, and the money flow index, which is a volume-weighted relative strength measure, is well above both its signal average and center line. This fund is likely to see the most gain relative the other funds if the uptrend in Europe remains on track

Action Alerts PLUS, which Cramer manages as a charitable trust, has no positions in the stocks mentioned.