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Tickers in this Article: EWU
Stocks enjoyed another day in green territory as investors shook off looming threats from the eurozone as no major economic data releases hit the street. The upcomingfiscal-cliff at home also slipped under the radar as major equity indexes had no problems gaining on optimism; the S&P 500 Index closed just above the 1,400 level, continuing its streak of higher-highs and lower-lows since early June of this year with full force. Investors will turn their attention to the iShares MSCI United Kingdom Index Fund (EWU, A) later today as it may gap at the open following the overnight reaction to the latest Bank of England inflation report. Investors will keep a close eye for any economic commentary from the bank as it may offer insights as to how well the British economy is holding up amidst theturbulencein the neighboring European currency bloc.

Chart Analysis

EWU is currently trading in a “sweet spot” from a technical perspective. Notice how this ETF appears to have finally broken out of its trading-range; EWU has closed above $16.80 a share for two consecutive days now, which issignificantbecause it previously failed to summit this level on two occasions. EWU had been oscillating between $15.60 and $16.80 a share since mid-June of this year, failing to settle above $16.80 ashareon June 20 and lateragainon July 19. This time around bullish forces prevailed at the resistance level, propelling EWU past its 200-day moving average (yellow line) and potentially back on track to resuming its steady, longer-term uptrend.

Conservative investors may wish to hold off from jumping in long at current levels given the loomingfundamentaluncertainties plaguing the region.

Outlook

If EWU continues to march higher, the next resistance level in sight is all the way at $17.50 a share. On the other hand, a concerning inflation report could reignite profit taking pressures in overseas markets and potentially send EWU tumbling lower; in terms of downside, this ETF has minor support near $16.50-$16.25 a share followed by the $15.60 level.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.

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