3 Emerging Countries That Have Established Convincing Uptrends

"Buy when people are fearful" has always smelled like good advice. Of course, the smell seems most potent for investors after the flowers have already been cut.

In other words, lots of people are kicking themselves for not buying something... anything... back in early March. Now they may be hoping that the Monday morning sell-off will give them a second opportunity.

There's little denying the powerful drive of the prior 6 weeks. Granted, a predictable profit-taking Monday beat back the bulls on April 20. Nevertheless, it had been more than 70 years since the U.S. market had powered 30% higher in a mere 30 trading days.

And yet, there were moves that some may find even more impressive. Emerging markets collectively garnered 36% in the same time period. In fact, since many of the emerging countries never suffered quite so heinously in the January-to-early-March mauling of developed country markets, many "emergers" have substantive 2009 gains.

What's even more remarkable, however, is the tentative "uptrend" status for 3 countries; specifically, there are at least 3 countries that are currently trading (through Friday, April 17) more than 5% above a long-term moving trendline.

1. China. Both the SPDR S&P China ETF (GXC) and the iShares FTSE China 25 Index Fund (FXI) are significantly above their 200-day exponential moving averages. Through 4/17/09, GXC was 8.2% above, while FXI was 6.5% above the technical indicator.

While moving from below a moving average to above one does not necessarily mean gains for an ETF, both the SPDR S&P China ETF (GXC) and the iShares FTSE China 25 Index Fund (FXI) have been profitable in 2009. Through 4/17/09, GXC and FXI gained 14.1% and 11.5% respectively.

2. Chile. The iShares MSCI Chile Index Fund (ECH) has garnered a Latin American prize of 24.6% year-to-date (through 4/17/09). It owns momentum gains for 8 weeks and 12 weeks as well.

Yet what may make Chile a bit more attractive to foreign investment dollars is its genuine diversification across different economic segments. No sector has more than a 15% weighting, and financials only account for roughly 10% of the index fund. (And, of course, it's no secret that China's been buying up the world's copper... while Chile is one of the world's leading exporters of copper!)

3. Israel. It's a stretch to describe Israel as an emerging market. In fact, the country meets every criteria for developed nation status that one might design. That said, the companies in Israel are growing at a pace that is more like counterparts in developing regions.

The iShares MSCI Israel Invest Market Index Fund (EIS) has picked up a phenomenal 20% in 2009, mostly on the strength of its cutting edge involvement in technology. But it's every bit as impressive to note that EIS recently climbed above a long-term indicator... and that its March lows were higher than its November lows.

Disclosure Statement: ETF Expert is a web log ("blog") that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.

Comments

[Vinsanity:]

Taiwan. India. Two more countries that may get bids, plus benefit from the global economic stimulus without spending a dime.

Apr 21 10:39 AM

[JGL:]

Seems it is too late to enter China and Chile and a correction may be on the way??
Any thoughts on why enter now??

Apr 21 12:31 PM

[ravindranat...:]

indian markets are significantly off low and are on way to new lows.bulls are charging with illegall wealth from swiss banks finding its way home.but this is the ideal set up for hedge funds to sell, sell.so bye bye BULLS, hello BEARS is just around the corner.

Apr 21 11:03 PM