Following the corrective low in global equities in 2020, India emerged as a standout performer, keeping pace with the U.S. market through 2024. However, the tide has shifted in 2025, as Indian equities, represented by the iShares MSCI India ETF (INDA), have lagged significantly behind their U.S. counterparts, achieving only a 3.44% year-to-date return.
Despite this slow start, analysts are optimistic about a potential turnaround for INDA, as the technical landscape hints at a strong finish to the year. The ETF has been entrenched in a corrective phase for over a year, characterized by a triangular pattern of converging highs and lows. Breakouts from triangle formations are closely monitored in trading circles because they typically signal strong upward momentum.
As the week begins, INDA is positioned just above the upper boundary of this triangle at approximately $54.50, signaling the potential for a breakout. To validate this breakout, analysts seek two consecutive weekly closes above this threshold. A confirmed breakout would constitute a bullish intermediate-term signal, coupled with a weekly MACD “buy” signal, with price targets set around a significant resistance level of $59.50.
Current market conditions do not seem to hinder this prospect; the ETF’s short-term momentum has turned positive, which is encouraging. Last week, it cleared short-term resistance from the daily cloud model, bolstering the chances of distancing itself from long-term triangle resistance in the upcoming weeks. A near-term price target of around $55.90 aligns with a previous peak observed in June.
Furthermore, the INDA to S&P 500 Index (SPX) ratio confirmed an intermediate-term counter-trend buy signal last week, based on Tom DeMark’s TD Combo® model. Historical data suggests that similar signals have previously heralded a period of outperformance lasting several weeks. Analysts expect an additional eight weeks of favorable performance for INDA relative to the SPX.
For investors holding long positions in INDA, the guideline remains to keep the ETF above its 200-day moving average—typically around the 40-week mark—for risk management purposes. Falling below this level would compromise the triangle formation and could signal trouble for those invested.
In summary, while the early part of 2025 has been challenging for Indian equities, the technical indicators are pointing toward a possible bullish shift, offering investors a glimmer of hope for a strong finish to the year.
