Over the five trading days since my post last Thursday all
four BRIC nations have moved higher. From a purely
technical perspective this provides a level optimism
that we may see additional gains in the future.
Brazil, here represented by the iShares MSCI Brazil Index ETF
), was down from Wednesday November 29 until it popped on
Wednesday December 5, moving up from a close of $51.46 on Tuesday
to a close of $52.34 on Wednesday. That is a gain of nearly
The gain is welcome and adds some support to the idea that EWZ
bottomed in May. Since early November it apperas to have
been establishing a floor from which a slow climb higher could
Russia, here the Market Vectors Russia ETF (RSX,
), enjoyed success as well. From a close of $27.41 on
Wednesday November 28 the ETF rose to a close of $28.38 on
Wednesday December 5. That is a return of nearly 4%, double that
RSX also appears to have bottomed this past summer. The
trading activity of the past week propelled the ETF to the middle
of its consolidation range. Barring
any unforeseen developments I can see the ETF trading
higher toward $30.00 with the downside risk limited to about
The best performing of the four
profiled here is EPI, the WisdomTree India Earnings Fund (EPI,
). It is up approximately 6% over the same period.
This is significant trading activity as the ETF broke out
last Thursday, opening higher than the previous days high and
closing higher on the day. This is sometimes referred to as
"gapping up". This is also generally interpreted as a
positive indicator and apparently was taken as such by traders
since the ETF continued to trade higher through Wednesday,
Like the othe BRICs this ETF also bottomed in the early
summer. That bottom also matched lows achieved at the end
of 2011, perhaps a "double bottom". A double bottom is also
generally perceived as a bullish indicator. EPI is still
consolidating but has a steep grade relative to the higher lows
and is approaching the top of its trading range.
Finally FXI, the iShares FTSE/Xinhua China 25 Index ETF
). As with the others FXI has traded higher and gapped up.
But unlike EPI that gap up
only occurred yesterday, giving the ETF an approximate
4% gain for the week.
That gap higher took the ETF above the top of its recent
trading range, another significant indicator. FXI also bottomed
in late summer and aggressively tested that bottom before
beginning to ascend in September giving it
more legitimacy After assessing these factors I
will find it surprising if FXI does not trade higher moving
For short term traders keeping an eye on emerging markets
there is something to be optimistic about in these charts and the
ETFs performance. Fundamentals aside, all four of these
ETFs should trade higher in the near term.
But they must also be monitored closely. All of this
analysis gets thrown out the window as soon as a significant
piece of unexpected bad news gets released. There
is a lot to be concerned about. But there are always short
term profits to be had.