Wednesday's ETF Chart To Watch: MSCI Germany Index Fund (EWG)

Buying pressures remained strong on Wall Street yesterday even after lackluster economic data hit the street; the latest ISM non-manufacturing figure came in at 55.2, marking a small contraction from the previous month's reading of 55.7. Euphoria levels rose on Tuesday after PC maker Dell Inc. agreed to be taken private in the largest leveraged buyout since the recent financial meltdown. The S&P 500 Index posted fresh five-year highs as the benchmark closed just below the 1,515 mark on the day .

With no major economic data releases slated to take place later today on the homefront, investors will likely turn their attention overseas. As such, the iShares MSCI Germany Index Fund could be quite active on the day as investors digest the latest German factory orders data, which is due just hours before Wall Street's opening bell. Analysts are expecting for the factory orders figure to show a contraction of 1.2% versus last month's reading of negative 1% .

Chart Analysis

German equity markets have traded higher alongside U.S. stocks since the start of 2013, and while EWG is far from setting multi-year highs, the strength of this fund's uptrend is undeniable; notice how this ETF has risen along a fairly steep sloping support line since bottoming out at $18.44 a share on June 28, 2012. Furthermore, EWG's uptrend has gone on largelyuninterrupted with the last major correctionoccurringin November of last year. Since November 16, 2012, every minor pullback in this ETF has welcomed buyers, and its most recent dip appears to have done the same as the price managed to hold above the $25 level .

Click to Enlarge Traders looking to get in long at current levels may wish to set a stop-loss at the previous low around $25 a share, since a break below this level would likely welcome accelerating selling pressures that could sink EWG all the way to $24 a share .

Outlook

If the latest factory orders data inspires buying in the German market, EWG may be in for a very green day; in terms of upside, the next resistance level for this ETF comes in at around $26 a share. On the other hand, worse-than-expected data may welcome profit-taking pressures; in terms of downside, this ETF has support around $24 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.