Tuesday's ETF Chart To Watch: MSCI Canada Index Fund (EWC)

Equities kicked off the session with a mini-rally at the opening bell only tosuccumbto profit-taking pressuresthroughoutthe day as fiscal cliff woes remain the dominant theme on Wall Street.Encouragingcomments from Treasury Secretary Geithner over the weekend regarding the tax rate hikes for wealthy Americans caused the market to shed its optimism, although it wasn't enough to bolster major domestic indexes into green territory on Monday. With no major economic data releases taking place on the homefront today, investors will turn their attention to the north where the Bank of Canada is slated to announce its interest rate decision. As such, our radar will focus on the iShares MSCI Canad Index Fund , which could experience volatile trading depending on how markets digest the latest outlook issued by Canada's central bank. Analysts are expecting the benchmark rate to remain at 1.0%, although the additional economic commentary may offer more valuable insights.

Chart Analysis

EWC appears to have completed a healthy correction since hitting $29.63 a share on September 14, 2012. Since declining down to $27 a share in mid-November, EWC has managed to bounce higher as evidenced by the fact that this ETF is once again trading above its 200-day moving average (yellow line). EWC's sideways price action over the last week is less than bullish; however, building out support above $28 a share is encouraging as this may suggest a rising level of support, in which case further upside becomes a greater possibility.

Click to Enlarge Despite trading above its 200-day moving average, we advise conservative long-term investors to consider waiting for EWC to establishdefinitivesupport above $28-$29 a share, depending on individual risk preferences, before jumping in long.

Outlook

If the latest commentary from the Bank of Canada paints a bullish outlook, EWC could be in for a green day; in terms of upside, this ETF has major resistance around $29 a share (red line). On the other hand,worrisomecommentary could invite bearish pressures on the day; in terms of downside, EWC has major support around $27 a share.As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques.

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Disclosure: No positions at time of writing.