India Fund: Doing The Bollywood Dance
I began this week comparing the market’s resurrection to nothing short of a Mexican Hat Dance.
Today, I highlight India and particularly the ETF IFN or the India Fund.
Since early 2017, IFN has choreographed itself into a dazzling Bollywood performance.
IFN invests primarily in equities of Indian Companies. Designed to measure the performance of the large and mid-cap segments of the Indian market, the index covers approximately 85% of the Indian equity universe.
Bollywood Dancing has taken the world by storm partly because non-Indians are fascinated by the exotic, larger than life qualities inherent in it.
The ETF IFN has yet to take the world by storm.
Nevertheless, with the recent move up in IFN, will it follow in Bollywood’s larger than life footsteps?
In a Bollywood Dance, a series of hand, neck, head and foot movements all help to tell a story or demonstrate a theme.
(Click on image to enlarge)
What story does the monthly chart tell?
The dotted line is the 23-month moving average. The solid line is the 80-month MA.
Since an almost perfect double bottom made in early 2016 and early 2017, IFN has moved up over both moving averages.
That makes 23.00 the area it should hold. Should it clear 26.00, it’s possible it can continue its upward trajectory to around 30.00-32.00.
What are the implications for India and the West?
On the home front, India’s Prime Minister has stressed infrastructure development and people-to-people connectivity.
Beyond the South Asian region, India remains well below its potential as an economically integrated region in the world.
However, Central Statistics Organization and International Monetary Fund numbers indicate that India is now the fastest growing major economy in the world.
India is forecast to grow at 7.7% in 2017. To stay there, the country must continue to bring the financial and telecom sectors into digitalization.
Should India grow to meet its potential as an economic influencer, that implies a level of confidence in Western Trade Policies enduring.
Bollywood Dancing, with its bolder and more extroverted movements, captures wide audience attention. Its evolution is a process that is entirely Indian and yet cross-cultural at the same time.
Henceforth, the India Fund IFN may also evolve into its own international sensation.
S&P 500 (SPY) 235.75 area resistance. 233.40 key support. Low volume day.
Russell 2000 (IWM) An absolute key to the whole picture, it must hold 134 and clear 136-136.70 the 50 DMA.
Dow (DIA) Inside day. 204.80 the 50 DMA. Back thru 208 nothing short of a miracle
Nasdaq (QQQ) With all its strength, it did not clear 132.43 the all-time high
KRE (Regional Banks) 53.00 pivotal support now. Over 54.50 better. The family needs this to hold
SMH (Semiconductors) Wonder Woman cannot give up now. 79.15 first low to hold, 80 must clear.
IYT (Transportation) Quiet inside day. Wedged now between holding 162.80 and clearing 164.50. Whichever comes first is key.
IBB (Biotechnology) To be a big brother, this must clear over 296 and hold 286.
XRT (Retail) 42.00 is a good level to hold but really, now it must get over the 50 DMA at 42.80.
GLD (Gold Trust) Quiet inside day. 120.25 the 200 DMA with 118 pivotal
SLV (Silver) 16.90 support. Back to outperforming gold
GDX (Gold Miners) 22.50 support 23.43 resistance
USO (US Oil Fund) Better but really just noise until it closes over 11.00
OIH (Oil Service Holders) Has my attention now since reversed, cleared the 200 DMA and the 50 WMA. 30.20-30.50 key weekly support
TAN (Solar Energy) 17.45-17.50 a good place to clear
TLT (iShares 20+ Year Treasuries) Into resistance and under 120.50 will look weaker still
UUP (Dollar Bull) 25.78 support and 26.00 overhead resistance
Disclosure: None.