iShares MSCI Emerging Markets ETF (EEM)
By Michael Cintolo, Vice President of Investments and Editor of Cabot Market Letter and Cabot Top Ten Report From Cabot Wealth Advisory, 8/5/10. Sign up for free Cabot Wealth Advisory e-newsletter
I'm watching the exchange-traded fund (ETF) that tracks the MSCI Emerging Markets Index (EEM). Emerging markets, of course, were all the rage for much of last year, and EEM rallied from a bear market low of 19.5 all the way to 41.3 in October.
But then, the ETF effectively entered into a long consolidation phase—shares made a marginal new peak at 43 in January, but bobbed (down to 36 in February) and weaved (back up to 44 in April) and bobbed (down to 35 in May) and are now weaving again (back up to 42.5 this week).
The bottom line is that shares have been consolidating their huge 2009 advance for more than nine months, and I think EEM is ready to enter a new, sustained upleg. Backing this view is the action of commodity-related stocks, which tend to trade alongside emerging markets (China in particular), and are showing renewed strength.
My bet is that if the market rally is for real, EEM could be a leader among ETFs.
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Vice President of Investments and Editor of Cabot Market Letter and Cabot Top Ten Weekly
A growth stock and market timing expert, Michael Cintolo is editor of Cabot Market Letter and Cabot Top Ten Weekly. Since joining Cabot in 1999, Mike has uncovered exceptional growth stocks and helped to create new tools and rules for buying and selling stocks. Perhaps most notable was his development of the proprietary trend-following market timing system, Cabot Tides that has helped Cabot place among the top handful of market-timing newsletters numerous times.
|iShares MSCI Emerging Markets ETF (EEM)
Category: Diversified Emerging Mkts
Fund Family: iShares Trust
Net Assets: 38.96B
Fund Inception Date: Apr 7, 2003
Legal Type: Exchange Traded Fund