Below that and we are back into this range that we do not want to be a part of. That looks to me like a reasonable target.įrom a risk management standpoint, this is only something we are willing to be long above the highs from the past 6-7 months. The 261.8% Fibonacci extension of the base is around 28.50. But I think the fact that we are talking about such an obnoxiously extended base (where I have been waiting so patiently for a resolution), can take us much much higher than 26. The measured move target alone based on the vertical length of the base takes us to 26. The old saying is, “The bigger the base, the higher in space”. For example, India looks nothing like Russia….īased on the size of this base I think there could be a lot of upside in this name. But I think that some of these are so different than others, that not only should we look at them and compare them as a group, but looking at each one on its own is important as well. When people talk about “Emerging Markets”, it tends to be all of them as a group with different, random weightings. That, in my opinion, was the catalyst to finally break this out to new highs. Notice how in December, prices briefly broke down below the bottom end of the range, only to quickly bounce back into it. With that said, look at this thing breaking out: Excuse all of the spacing between the bars, but a global ETF like this that trades opposite hours to its U.S. We’re looking at a daily bar chart of the Wisdomtree India Earning Fund $EPI which includes holdings like Reliance Industries, Infosys, Tata Motors, some Indian Banks, etc. Today I simply want to point out the consolidation over the past 6-7 months since the initial explosive rally in India early last year. Here is the long-term chart showing the beautiful uptrend over the past few years within the context of a much more massive run up: What a joke they’ve both become….Īnyway, India is our main focus today as the Nifty Fifty hits all-time highs. Sure enough, look at India a year later and look at these disasters in Russia and Brazil. Relative strength like that simply cannot be ignored. While the other BRIC nations were breaking down to new lows, Brazil and Russia specifically, India was somehow breaking out to new highs. A year ago I was pounding the table to get long India though some of the more liquid US ETFs (see: Not All Emerging Markets Are Created Equal). I really love everything that we’re seeing out of that country. What a run it’s been for stocks in India over the last few years.
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