Emerging Markets had a tough 2018. They started to fall in January along with the US Equity markets, but unlike the latter, they did not get a mid year rally. They just kept going lower. By June they had fallen below long term support levels. A retest of that support area in July failed and they continued to the downside.
Since that retest Emerging Markets have continued lower and with falling trend resistance. There have been times when they seemed ready to reverse and move higher, but each time they failed at this resistance. Currently Emerging Markets are at resistance again. What will happen?
The latest touch at resistance comes after a second stop at what may be building support. The December low was a retest of the October low, and technically a higher low. That gives this test of resistance added importance. A break above it is the start of a reversal. a continued move above the November 30 high confirms a double bottom and adds weight to the reversal story.
They are already exhibiting strong momentum with the RSI at the highest level since the end of January and pushing back into the bullish zone. The MACD is similar, with a nearly 52 week high and now positive. There is no race to the upside yet, but it is worth keeping an eye on Emerging Markets in the short term.
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