MSCI Emerging Markets Index Fund Is in a Well Structured Setup

Published on Thursday, 16 August 2012 08:28 Written by TradersHuddle Wire

New York, August 16th (TradersHuddle.com) - MSCI Emerging Markets Index Fund (NYSE:EEM) closed the trading day at $40.30, near its 50 day and 200 day moving averages set at $38.80 and $40.37 respectively. MSCI Emerging Markets Index Fund's price action placed the stock above the 50 day moving average but below its 200 day moving average, providing a nice trading setup with clear reference points.

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.

MSCI Emerging Markets Index Fund seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.

A tiered approach appears to be the best way to maximize possible movements in the stock, as traders could establish a small position in MSCI Emerging Markets Index Fund and wait for the stock to break out above the 200 day moving average at $40.37. Then they could add to the position as momentum builds with the breakout. On the other hand, if support being referenced at the 50 day moving average set at $38.80 breaks, it could signal further downside for MSCI Emerging Markets Index Fund in the horizon.