Tuesday's ETF Chart To Watch: MSCI Italy Index Fund (EWI)

Equity markets kicked off the first full trading week of 2013 with a whimper as profit-taking pressures made an appearance across Wall Street. With fiscal cliff woes off everyone's mind until February at least, the headline development in focus over the coming weeks will certainly becorporateearnings season. Aluminum giant Alcoa kicks off the ceremonies later today, and with no major economic reports due on the homefront this week, quarterly performance results will surely come under the microscope.

With no major economic releases slated to hit the street until the European Central Bank rate decision on Thursday, investors may find themselves digging through data that often goesunnoticed. Italian employment data in particular is slated to come out before Wall Street's opening bell and, as such, the iShares MSCI Italy Index Fund will be in the spotlight. Analysts are expecting Italy's unemployment rate to come in at 11.2%, marking a slight deterioration from the previous month's reading of 11.1% .

Chart Analysis

The Italy ETF has endured a lackluster start in 2013, however, its sideways price action does offer some bullish evidence; first and foremost, EWI appears to be establishing support above $13 a share, a key level that it previously failed to settle above during the last quarter of 2012 (namely in mid-September and mid-October). Another encouraging sign is the fact that EWI has been climbing higher along a steadily rising support level since its most recent rebound off the 200-day moving average (yellow line) in mid-November of last year.

Click to Enlarge Investors looking to jump in long at current levels should exercise caution; notice that EWI is nearing a majorresistancelevel (red line) around $14 a share, which it failed to summit on March 19, 2012 and most recently again on September 14, 2012 .

Outlook

If Italy's employment report paints a gloomier-than-expected outlook for the struggling eurozone member nation, EWI may facestrenuousheadwinds; in terms of downside, immediate support for this ETF comes in at $13 a share. On the other hand, upbeat results maypropelEWI closer to its historic resistance level, which lies around $14 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.