EPI - 6 month chart

The emerging markets have been smoking hot for two weeks.  Let's take a look at WisdomTree India Earnings (EPI).  What looked like a reverse head and shoulders that began in early August has now given the impression that this security is in a V-shaped style recovery.  EPI bottomed at the end of August and has retraced everything it lost in the month of August.  

The chart I've attached does not show Volume, but Volume has picked up on average between 50-100% depending on which day you look at.  The optimism in this ETF is coming from both shorts covering as well as value investor putting money to work.  YTD (Year To Date) this ETF is -28% and trailing 12 month return is -15%.  EPI looks like it has resistance at $17 and then at $19.

The stock is way ahead of the 8, 12, and 20 Day Moving Averages.  

So here's the analysis.  8 Day Moving Average is $14.70.  Stock closed at $15.65 on 10-Sep-2013.  Tier 1 is $17.  Tier 2 is $19.

A purchase at $15.65 is giving one upside of $1.35 (1.35 = 17 - 15.65) vs downside/stop loss of .95 (.95 = 15.65-14.70).  You would be risking .95 for 1.35 or 7:5.  7:5 isn't bad at all considering the potential upside in this ETF in the short term.  Yes, the stock is high and it's above it's moving averages, but I'm a fan of "Buy High, Sell Higher".  This isn't investing, it's trading.  

As always, it's important to define risk AND time parameters.