Global Emerging Markets are Strengthening

Emerging Markets were hated at the end of last year. It was not clear if they’d continue to hold their lows from 2011-2012. They have rebounded and sustained it, pushing close to a two year high.

In the chart below we plot EEM with 400-day bollinger bands. We also note EEM’s forward PE ratio at various spots. The current PE ratio is about 10. Long-term volatility as measured by the bollinger band width is at one of the smallest levels ever. Emerging Markets are in good position for a strong trending move over the coming years. A weekly or monthly close above $47.50 would signal a major breakout.

 

May22EEM