Help On The Way For An ETF That Doesn't Need It

Let's be honest: After surging more than 20% in the past three months, the iShares MSCI South Africa Index Fund (NYSE: EZA) doesn't need any help when it comes to moving higher, but the ETF may be in for another short-term pop.

Fitch Ratings may upgrade the outlook on South Africa's BBB+ credit rating to stable or positive from negative next month, according to Bloomberg News, which cited a South African press report that cites a Fitch analyst.

Fitch said the country's budget deficit announcement, scheduled for October 27, will be the "swing" factor in its review.

Assuming the best, Fitch upgrades South Africa and EZA. Assuming the worst, Fitch doesn't upgrade South Africa and EZA probably still goes higher thanks to South Africa's status as a major gold exporter. In fact, EZA has sharply outperformed the SPDR Gold Shares (NYSE: GLD) in the past three months.

Support looks firm at $66, but EZA may not pullback to that area, so it might be best to just start a small position here.