Emerging Markets Could Be Starting A Relief Rally

Over the past 4+ months, many emerging markets have come under pressure as the global markets were roiled by the sudden and relatively deep market retracement in early February. For many, this downward price trend has been frightening and somewhat disastrous. Recently, though, something new appears to be on the horizon that may be the early signs of renewed life for many Latin American, South American and Indian markets – early signs of support and a potential bottom formation in the works.

Our researchers have been following the recent moves in these emerging market ETF for Brazil, Latin America, and India with great interest because we believe in finding opportunities when many others may not be looking for them. We believe these early warning stages of a market bottom could be an excellent time to “forward think” any possible price recovery that may occur in the near future and to prepare for any success opportunities that may arise.  Heck, we are traders and if the opportunity exists for a decent profit with little risk, we’ll investigate it.

Let’s get started with this Daily chart of the BRZU (Brazil Bull 3x ETF).  We can see from this chart the extended downtrend channel that has existed for nearly 4 months.  Near the bottom right side, pay close attention to the horizontal price channel that is setting up – this could be an excellent bottom rotation channel resulting in an upside breakout eventually.  With only 3 to 7 days to go before the upper price channel may be challenged and a clear double bottom formation near $16, any downside rotation below $17.50~18 would be an excellent buying opportunity range with $16 being our protective stop level. Assuming this channel continues as price reaches this apex, at some point price will either rotate higher or continue to channel lower (below the $16 level). So, buying near the lower range of this horizontal price channel may be a great opportunity for an upside move.

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