By Richard Rittorno
With all the doom and gloom in the eurozone, China and, in general, mixed economic data out both in developed and emerging markets, we can find a bright spot in India’s equities and economy.
India's National Stock Exchange, known as the NIFTY
India’s President Pranab Mukherjee suggested that India’s markets are back on track to a healthy and steady growing economy at the ‘India Chem 2012'.
President Mukherjee said during his speech that the Indian economy is “witnessing a rebound.”
He went on to point out that India’s manufacturing policies are paying off with an increase of 16-25 percent in GDP by the year 2025. He also indicated that by 2022 India could create an impressive 100 million additional jobs.
To confirm President Mukherjee comments, just look at the daily chart of Wisdom Tree India Earnings Fund (EPI), an ETF that seeks to track India’s earnings index.
After consolidating all summer long, the EPI began to move higher in September and is now trading above the consolidation, a very bullish chart.
Using the Fibonacci tool from the EPI’s low, we find a 61.8% target just above the 52-week high of $21.59. The Fibonacci’s are lining up very well with the 27% extension level, a common resting place for price action before continuing higher that falls right on top of the next resistance level. This is key as we know price many times will rest or consolidate to gain momentum before breaking through resistance and support levels.
The 61.8 extension as mentioned is just above the 52-week high or second level resistance price will need to break through. All bullish.