3 Emerging Markets ETFs for Short-Term Traders

Here are three emerging markets country fund ETFs that were in pullback mode as of midweek. What sets these ETFs apart in many ways is the fact that they are both short-term oversold and trading in bull market territory above their 200-day moving averages.

Closing lower by more than 1% percent on Wednesday, the iShares MSCI Malaysia Index Fund ETF (NYSE: EWM) is again trading just outside of technically oversold territory. The pullback in the fund comes in the wake of new, 6-month highs reached near the beginning of the month.

EWM has been trading above its 200-day moving average only since late January, and has not finished consecutively at oversold levels in a month. Then, after closing lower for three out of four trading days in mid-February, shares of the ETF traded higher for the next three days in a row, gaining more than one and a half percent.

With a negative edge of a quarter of a percent, and neutral ratings, EWM may need to break down to new lows before the edges turn to the positive and the stock’s ratings begin to improve.

Another emerging markets ETF, the iShares MSCI South Africa Index Fund ETF (NYSE: EZA) is also moving toward levels where traders historically have become attracted to the fund as a short-term buying opportunity. EZA has finished lower for three out of the last four trading days, and was down one and three quarters of a percent on Wednesday.

Like EWM, EZA has been trading in bull market territory consistently since the final days of January, rallying to new, 6-month highs at the beginning of March. EZA is trading just inside of technically oversold levels, and has a positive edge in the short-term of more than half a percent. The fund has neutral ratings of 6 out of 10 ahead of trading on Thursday.

The biggest decliner of all the exchange-traded funds in today’s report is the iShares FTSE/Xinhua China 25 Index Fund ETF (NYSE: FXI), which pulled back by more than 3% in Wednesday’s session.

The sell-off in FXI puts the fund at its most oversold level in a week, retracing much of the bounce FXI earned in Tuesday’s session. FXI has neutral ratings of 5 out of 10, and a significant edge of more than 1%.

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David Penn is Editor in Chief of TradingMarkets.com