A loyal Real Money subscriber sent me an email asking about the shifts going on in globalization and supply chains, and whether this was an opportunity for Indian equities. Interesting question and that prompted me to look at the iShares MSCI India ETF (INDA) .
Let's check it out.
In this daily bar chart of INDA, below, we can see a bottoming pattern playing out since March. Prices look like they are hammering out an inverse head and shoulders pattern. A left shoulder in March. A head in June and we are in the process of a right shoulder, or even a complex right shoulder. Prices are trading between the declining 200-day moving average line and above the rising 50-day moving average line.
The daily On-Balance-Volume line has been steady since a May low. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but correcting.
In this weekly Japanese candlestick chart of INDA, below, we can see some interesting clues. Prices have pulled back but have firmed to retest the declining 40-week moving average line. The weekly OBV line shows a steady trend for months even while prices have corrected. The MACD oscillator has crossed to the upside from a cover shorts buy signal.
In this daily Point and Figure chart of INDA, below, we can see a potential upside price target in the $54 area.
In this weekly Point and Figure chart of INDA, below, we used a five box reversal filter. Here the software projects the $65 area as a target.
Bottom line strategy: Traders with patience could look to buy INDA on a decline to the $41 area if available.
