Exchange traded funds tracking India, Asia’s third-largest economy, have already endured their fair share of punishment this year. Of the 10 worst-performing non-leveraged ETFs over the past month, six are India funds. More pain could be on the way for Indian stocks and ETFs if one technical analyst is correct.

Ouri Mimran, a technical analyst at Natixis, a French bank, said the benchmark S&P BSE Sensex may fall to as low as 16,400 after sliding below the 18,150 level last week and thus breaching an April low, Corinne Gretler reported for Bloomberg. That would be an almost 9% decline from the index’s close on August 27.

The ominous technical outlook comes as foreign investors are selling Indian shares, though at modest levels relative to year-to-date inflows. Coupled with less-than-encouraging technicals for India ETFs are deteriorating fundamentals that include the faltering rupee and widening current account deficit that has spurred some chatter of India perhaps losing its investment-grade credit rating. At BBB-, India is already the lowest-rated BRIC nation. [India Fund Flows Tell Diverging Stories]

In the Bloomberg interview, Mimran noted that a head-and-shoulders pattern on the Sensex has been confirmed, which could lead to new lows for Indian stocks. The right shoulder in the head and shoulders pattern is spotted when a third peak is made, but one that is below the second peak. The pattern is confirmed when the ensuing sell-off takes a stock or ETF below the previous low, also called “neckline support.” [India ETFs Fall as Rupee Hits Record Low]

As for the major India ETFs, the technical situations are similarly glum. The WisdomTree India Earnings ETF (NYSEArca: EPI) has not traded above its 200-day moving average since May and is struggling to stay within a downward sloping channel. The iShares India 50 ETF (NasdaqGS: INDY) closed at an all-time low earlier this week and resides 21.4% below its 200-day line. The Market Vectors India Small-Cap ETF (NYSEArca: SCIF) has lost 22.1% since being reverse split on a 1-for-4 basis on July 1.

Market Vectors India Small-Cap ETF

ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.