Playing the Setup in MSCI Emerging Markets Index Fund

Published on Friday, 10 August 2012 08:28 Written by TradersHuddle Wire

New York, August 10th (TradersHuddle.com) - MSCI Emerging Markets Index Fund (NYSE:EEM) closed the trading day at $40.54, near its 50 day and 200 day moving averages currently set at $38.53 and $40.38 respectively. MSCI Emerging Markets Index Fund's price action placed the stock above these important levels, which could translate into a trading opportunity.

MSCI Emerging Markets Index Fund (NYSE:EEM) is a fund that corresponds to the price and yield performance, before fees and expenses, of securities that are publicly traded in emerging markets, as represented by the MSCI Emerging Markets Index. The underlying index attempts to gauge the performance of equities in emerging markets globally.

Although, the price is above important moving averages, it's important to highlight that this is not a prime setup for buying the dip strategy, as the 50 day moving average is currently below the 200 day moving average.

The peaks and troughs algorithm shows calculated support at $37.15 and resistance at $40.58. These levels should also be evaluated by traders when planning their next move, as they provide an insight into the latest price action.

If traders want to establish a long position in MSCI Emerging Markets Index Fund, it will certainly be better to wait, given that the stock is technically broken with the 50 day moving average trading below the 200 day moving average. Traders can also look at the current range defined by the peaks and troughs to establish a short trade versus those levels.