According to our annual forecasts we predict that emerging markets will be bullish in the next 24 months. We believe that 2020 will be mildly bullish and will set the stage for a wildly bullish trend going into 2021. This obviously is a very important forecast because it may should us understand which allocation to set up for emerging markets, and how to play this market segments. New research by InvestingHaven’s team indicates that our forecast is not only validated on the emerging markets chart but even more promising than expected. Moreover, with the launch of our premium trading service which has one category focused on emerging markets (called ‘highly volatile with fast rewards’) we believe it is a perfect way to play this market segment, complementary to a longer term investment as per our 4 Top Emerging Markets for 2020.
That was a loaded introduction, so we should explain in a bit more detail what we are looking at and why we propose to combine a long term holding as an investment with shorter term oriented trades.
Interestingly though we start seeing new forecasts popping up with a bullish bias. That’s odd, because when we said that emerging markets would be bullish there was hardly any other source that with a similar viewpoint. Check these videos from CNBC with an outperformance rating, JP Morgan’s bright future call (also confirmed here),
The Monthly Emerging Markets Chart
First of all, the charts.
As per our 100 investing tips we always ‘start with the chart’, and take a top down approach (longest timeframe first). We also don’t want to look too much into the details of lower timeframes, like daily charts or charts that are a few months out.
The monthly emerging markets chart features a giant triangle pattern over almost 2 decades. As this pattern is bullish in nature it is no surprise that we see a series of higher lows in the last few years.
However, by far THE most important observation on this emerging markets chart is the inception of a new trend higher.
Successful investors are fast in identifying new trends. They get in once new trends start when literally nobody is talking about it. They prepare their exit plan once the herd gets in.
Today nobody expects emerging markets to be bullish because of trade wards, fears, economic recession, bla bla bla. As per Tsaklanos his 1/99 Investing Principles we expect 99% of investors to think this way, nicely lured into a bearish perception created by financial media.
We are on record here at InvestingHaven to be part of the 1% that is bullish on emerging markets, and that we will be part of the group of investors that will take 99% of profits. Note that we launched a method to even increase the profit potential with our newly launched emerging markets trade alerts.
The Weekly Emerging Markets Chart
If we zoom in into the new rising channel that we saw on the above chart we get an even more spectacular view.
The weekly emerging markets chart over 3 years gives the detailed view, and also confirmation of this new bullish trend. It has the form of a rising channel.
Not only does this emerging markets chart on a weekly timeframe confirm our viewpoint, but it also suggests that the bullish energy will be more powerful than we originally anticipated.
According to our emerging markets forecast we predicted an EEM ETF price north of 45 points in 2020 (we wrote this in September in the midst of heavy turbulence when this ETF fell below 40 points). For 2021 we forecasted a price north of 55 points.
The rising channel shown on below chart suggests that these price levels might be taken out easily. It suggests the market will exceed our forecasted prices.
[Ed. note on February 11th, 2020] This channel is still in play, even though the end of January / early February volatility was rude. Prices fell for less than 3 consecutive days outside of this new channel, only to get back. This confirms that the channel is in play, and our investing thesis is active!
How To Play This Powerful Emerging Markets Chart Trend
Next, the question comes up how exactly to play this trend which looks very promising?
There are two answers to this questions.
First the most obvious thing to do is pick one or two of the most promising emerging markets and take long term holdings. We featured the Brazilian market and Australia, but also 2 potential candidates being Vietnam and China.
We give directional suggestions, so we are not suggesting that investors have to buy all 4 of these emerging markets. In the end we are not allowed to do so, we cannot give financial advice. What we can do though is indicate in which direction to look, and collect more insights to back up a choice.
Long term investments are great provided they are in a powerful uptrend.
However, we believe they should be complemented with shorter term trades! Why? Because of the reinforcing effect they have.
That’s why we strongly suggest to consider shorter term oriented trades in emerging markets as well (on top of long term holdings).
InvestingHaven now offers a trading service which delivers astonishing results in markets that have powerful medium term trends.
Let us explain what this means.
In 2019 the EEM ETF essentially was flat. As seen on the weekly emerging markets chart above the EEM ETF had been yo-yo’ing between 39 and 45 points, a narrow range of 10%.
Our trading algorithm delivered a return of 500% in this time period. This can be verified with our detailed trade log book featured in our premium trading service.
However, in 2018 there were powerful medium term trends. The EEM ETF fell from 53 to 38 which is almost a 30% decline. Now THAT is exactly what our trading algorithm needs to have explosive profits. In that same period our trades delivered more than 10x fold profits. That’s correct, the EEM ETF changed 30% and our short term oriented trades delivered north of 1,000%.
That’s why we strongly believe that the next few years will be amazing for our trading algorithm, and that our emerging markets category in our trading service will deliver phenomenal results.
The chart of #emergingmarkets shows a new powerful bullish trend for 2020 and 2021. We want exponential returns by combining long term investments with shorter term trades. Check out this new trend and the way to play this. $EEM Click To Tweet