The Emerging Markets (EM) have been weak over the last month as the USD made a recovery rally. Today USD index is making a drop below the 50 day moving averages and the upside target of 97 we had noted (currently at 96.20).
This brings into focus the prospect of a ‘C’ leg of an A-B-C rally in commodities that was reviewed in NFTRH 345 and also the prospect of the EM fund EEM maintaining its series of higher highs and higher lows.
The daily chart shows EEM settling into a support zone. However, it could drop further, well into the 38’s and still maintain a higher low. So that is a caveat to buying now. But it is at the top end of notable lateral support.
Here is the weekly view clearly showing that EEM has retraced about 50% of the entire 2015 rally.
Buy Target: Higher risk: 40.50 to 41; Lower risk: in the 38’s (may not come about).
Sell Target: A higher high above 45.
Stop Loss: For the higher risk option, below 39.50. For the lower risk option, below 37.
As for individual stocks, I have traded SLCA, which will tend to roughly go with the commodity complex in an ‘anti-USD’ environment. Here is a daily chart showing higher highs and higher lows.
Buy Target: Current Level (29.91) down to the low 28’s.
Sell Target: Potential higher high above 40
Stop Loss: A lower low at 27.64 (with a buffer to suit individual risk tolerance)
A reminder that chart based NFTRH+ updates are just trade setup ideas, which may not be revisited as the parameters are already noted. They are meant as a starting point for further research if interested. Fundamentals-based ideas are also provided for your further research only. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst.