Wednesday, January 11, 2017

Emerging Markets (FXI, EWZ and EEM) Are On A Tear, And I Can't Quite Figure Out Why

I identified some buying opportunities in the Emerging Market's which have been on a ride lately with no sign of letting up. Brazil ETF EWZ was announced as a buy with the purple arrow some time ago with the short-term indicators, but the long term momentum indicators for Brazil just crossed over! I'd like to think I correctly identified a bull-flag that has resulted in this leap from a lower high back in November, but EWZ is now above the 144 day moving average.
China ETF FXI is not quite as well positioned on the long-term momentum indicators but did break out above an overhead resistance line and is making in-roads towards bullish territory.
Finally the Emerging Markets ETF EEM has been showing divergence on the shorter-term momentum indicator for two months now and is poised to make a crucial break above an overhead channel resistance line. Long-term indicators have already crossed over. A move above $36.40 would be a strong bullish signal.