iShares MSCI Malaysia Index Fund (EWM) — This exchange-traded fund (ETF), which generally follows the price and yield performance of publicly traded securities in the Malaysian market, fell from more than $13 in January 2008 to almost $6 in October.
From October until early April, EWM consolidated in a trading rectangle (box) that broke out on the upside at around $7.50. Following the breakout, prices hugged the 20-day moving average (green line), as well as a tight trend line where it now rests.
On June 4, at $8.78, I said, “Profit-taking could result in an opportunity to buy this emerging markets ETF below $8.50, but long-term buyers may want to take a partial position now and add to it on a correction.”
EWM has traded under $8.50 twice since June 4, and yesterday it broke above $9 on a high-volume breakaway gap.
Buy at market with a target of $11 or more.
EWM currently pays a dividend of 28 cents a share (3.06% yield) and has a net asset value of $8.80 as of July 14, according to ETF Connect.
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Sam Collins is a registered, fee-based portfolio manager who may be contacted at samailc@cox.net. You can also check out an archive of some of his most recent market outlooks.
