Int'l Insights: Bullish Stocks
MSCI EM Index Approaching 10.5-Month SupportIn our prior EM Strategy (August 7, 2023) we discussed how MSCI EM (EEM-US) was near major 1+ year resistance at $42. After being unable to break out, EEM-US consolidation has continued, and is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023. As long as EEM-US is above $37, we are buyers on this pullback. Continued strength in the U.S. dollar (DXY) remains a headwind, and $105.70 on the DXY remains a key level moving forward. We remain neutral on EM vs. EAFE; the EAFE vs. EM ratio is moving sideways following the 2.5-year downtrend reversal.
Below we highlight attractive and actionable themes within EM.
EM Countries. Our lone EM country overweight is India (S&P BSE SENSEX, S&P BSE 500); we downgraded both Taiwan (TAIEX) and Greece (ATHEX Comp.) to market weight in our September 9, 2023 Int'l Compass. With that said, much like we discussed in our prior EM Strategy report, there continues to be a plethora of smaller countries that are bullish, including Hungary, Indonesia, Argentina, Egypt, Romania, Peru, Chile, Turkey, UAE, and Pakistan (among others)... see page 2.
EM Sectors. MSCI EM Energy and Technology continue to be worthy of an overweight. Meanwhile, MSCI EM Consumer Discretionary and Financials have a significant number of attractive and actionable names -- add exposure...
Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.
Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.
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