Emerging markets appear to be heading higher. The iShares MSCI Emerging Markets ETF (NYSE:EEM) has spent the last 13 weeks consolidating inside its early January to mid-February range. The index looks to be on the verge of a breakout.
The $52.00 area (2018/2020 highs) has provided very solid support this year as the EEM pulled back after the huge run (+93%) off the March 2020 lows.
The very high overbought levels reached in late January have been worked off. Daily MACD is been trending near neutral since mid-March.
On the downside, a close back below $52.00 would violate last week’s low, sending a clear warning sign that a fresh rally leg has been put off.
Note: We are long EEM in some managed accounts.
You can read Gary S. Morrow's original post here.