Technical Thursday: BRICs keep rising

Since last week’s “BRICs break out” article, three of the four BRIC ETFs charted have continued in a similar vein. Today we update those charts and put the implications for the future in perspective.

The iShares MSCI Brazil Index ETF (EWZ, quote) has performed well since December 6.  

The ETF is up approximately 5% since and is having another up day today.  This trading activity certainly implies further upside in the near term

The one year chart also implies further upside as the ETF broke through resistance to get to where it is now.  Barring any unexpected negative fundamental information I think the ETF can establish a new floor for the share price near the $54.00 level.

RSX, the Market Vector Russia ETF Trust (RSX, quote), has also traded higher since my previous Technical Thursday.  

Like EWZ, RSX is higher by approximately 5%.  However the 1 year chart for RSX has yet to confirm a breakout from the ETF’s consolidation range.

 

But the ETF is pushing up against the upper limit of the range, approximately $30.00 per share.  Until it trades through $30.00 convincingly I will be on the lookout for a pullback.  Such a pullback could be as far back as the bottom of the range, in the area of $27.00 per share.

EPI, the WisdomTree India Earnings Fund ETF (EPI, quote), has had the weakest performance of these four ETFs over the past two weeks, essentially maintaining previously achieved levels.

This is not necessarily a bad thing as the ETF is holding its own, pushing up against the upper end of its trading range, similarly to RSX.

 

And as with RSX I will be looking for EPI to push through convincingly before calling for additional upside.  I recommend being positioned to protect the downside which could be as low as $18.00 per share.

Finally we look at FXI, the iShares FTSE/Xinhua China 25 Index ETF (FXI, quote), which has moved up very strongly since my last report.

 

FXI is up approximately 4% over the past two weeks.  It definitely broke out at that time and has continued the trend quite convincingly.

This breakout is most impressive on the one year chart above.  The ETF is pushing up against its 52-week high which, if it is able to get above and stay above, could imply bigger gains in the near future.

Looking at it from a longer three year perspective both the upside and downside are suggested with some clarity.

The downside could be as much as 20% lower from here, approximately $32.00 per share.  The upside near term is probably 10% or more.  There is some resistance at $40.00 per share, however, but I don’t think that a pullback to $32.00 is likely.

All four ETFs are currently giving investors something to be optimistic about.  Of course, uncertainty rules the day and demands vigilance.  I’ll revisit these charts again in the coming weeks.   

2 Responses to Technical Thursday: BRICs keep rising

  1. Nice article. And it looks like there is an upswing in the share prices coming. But unless you are superhuman and have the ability to time the market, you have taken a bath as I have over the last year or so. I am hoping there is a turn around or something….

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