that reside below their respective 200-day moving averages are,
by many technical analysts, believed to be showing bearish signs.
Those securities that have fallen 20 percent or more from their
peaks are said to be in outright bear markets.
With the broader market's November tumble still ongoing, an
increasing number of ETFs and ETNs are sporting both ominous
technical conditions. The affliction is especially prominent
among emerging markets ETFs, underscoring the notion that
valuation alone is not enough to spur some
Ignoring these technical signs could prove treacherous. For
those looking for opportunities from the short side or for
risk-seekers looking for bounces to the upside, the following
emerging markets funds are worth keeping an eye on.
iShares MSCI Brazil Index Fund (NYSE:
Aside from what proved to be a false breakout in September, the
largest Brazil ETF has spent no time above its 200-day line since
April. November has not been kind to EWZ as the ETF is off almost
four percent, frustrating investors that thought the fund
was showing signs of life in late October
Increased government regulation and rising consumer debt among
Brazil's economic hurdles, but the overall, long-term fundamental
outlook is more bullish than bearish. That said, patience is not
a virtue held by all investors and in the near-term, EWZ is a
fairly simple trade.
The ETF has shown a tendency to honor the $49-$50 area as
support several times in recent months, bouncing as much as 10
percent from that area. If EWZ declines to that area and holds
there, the fund is a legitimate swing trade from the long side.
Conversely, if that price range is violated on heavy volume,
buying some EWZ put options could prove to be a smart move.
EGShares Emerging Markets Metals/Mining ETF (NYSE:
Structurally, there is nothing wrong with the EGShares Emerging
Markets Metals/Mining ETF. In fact, in a risk on environment
where high-beta sectors and emerging markets are in favor, this
fund would command a spot at the top of savvy investors' shopping
lists. Unfortunately, that is not the reality of the current
EMT's price-to-earnings and price-to-book ratios
imply the ETF trades at a discount
to the broader emerging markets universe. That is not surprising
given that analysts and investors have said Brazilian, Chinese
and Russian equities all look cheap and those nations combine for
over 51 percent of EMT's weight.
EMT now resides more than 26 percent below its 52-week high
and 9.3 percent below its 200-day line. The fund closed at $13.26
on Wednesday, but those looking for a long trade would do well to
wait for EMT to retest support around $12.50.
Market Vectors India Small-Cap ETF (NYSE:
The Market Vectors India Small-Cap ETF is one of the funds that
epitomizes what has been a turbulent year for Indian equities.
Even though SCIF is up almost 19.5 percent year-to-date, the ETF
is nearly 26 percent below its February high and recently tumbled
below its 200-day moving average.
government reforms aimed at increasing foreign
, India ETFs rallied from September through early October. During
that time, SCIF moved to just over $11 from $9. Assuming a 50
percent retracement of such a move is in the offing, SCIF would
need to fall back to the $10 area before it becomes a buy
For more on emerging markets ETFs, click
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