Emerging Markets ETFs Gain Technical Momentum

“Emerging markets have benefitted year to date from the surprise U.S. dollar weakness, very strong earnings, and modest valuations. But investors want to know if this rally is still in the early innings or closer to the ninth,” according to LPL Financial in the Seeking Alpha post. “One major positive suggesting it’s early in the game is that the MSCI Emerging Markets Index is in the process of breaking out of a bearish trendline going back nearly 10 years, suggesting a major change in trend is taking place and EM could score more runs.”

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IEMG was the most popular ETF of the first quarter, bringing in $6.6 billion in net inflows so far this year, according to XTF data. Investors may be looking at this cheap Emerging Markets option as a way to gain access to emerging markets where valuations are much lower than the loftier prices in U.S. markets.

EEM currently resides about 13.6% above its 200-day moving average and has not closed below that level since early this year. The ETF trades about 29% above its 52-week low.