Tuesday, December 11, 2007

Emerging Markets Headed Higher

An examination of most emerging markets showed that many are bottoming out and are forming strong consolidation levels to rally from. Many have been oversold over the subprime mess. Even the clouds are clearing for US markets, and that should be a green light for a next upwave for most markets.

China has finally had a meaningful correction and uptrend for the longer term is still intact. Good base building has been happening over the past week, which was why I promoted the China dolls again. On any indicators, China markets have been way oversold. Even though higher rates, inflationary pressure and lending restrictions have restrained players, but buying has been building up. Brazil is the next market showing very bullish signs as well, followed by Korea.

The more battered Taiwan may rebound but its still showing some mid term weakness. Malaysia and Singapore would fall into this category, there will be some upside but inherent strength would be lacking as foreign funds are finding better markets for true exposure.

While among the bigger markets, HK is still getting plenty of attention and would be the best long market for the next 3 months at least.

1 comment:

sopskysalat said...


US sky seems clearer with numerous measures being introduced lately. Paulson's grand plan of freezing the reset rates, yesterday's concerted efforts by many central bankers and the liquidity injection by sovereign funds into banks.

What could go wrong in your opinion to stop the recovery in the market? China inflationary problem seem very tacky as the people are finding hard to afford a living.

Cheap money has flushed the market and driving up almost everything, everywhere.

Please correct my view. Thanks