The iShares Core MSCI EM IMI UCITS ETF traded lower on Friday, after hitting resistance near the crossroads of the 37.90 level and the downside resistance line drawn from the peak of February 16th. The slide was stopped at 37.11, still above the upside support line taken from Monday’s low. As long as the price is trading between the aforementioned diagonal lines, we will stay neutral.
In order to start examining the bullish case, we would like to see a clear break above 37.90. This will take the ETF above the downside resistance line and may pave the way towards the peak of March 3rd, at 38.50. If that barrier breaks as well, then we may experience extensions towards the peak of February 25th, at 38.80, or towards the 39.03 area, marked by the low of February 18th.
Taking a look at our oscillators on the 1-hour chart, we see that the RSI is flat near 50, while the MACD, although positive, sits below its trigger line and points down. Both indicators suggest a lack of directional momentum, adding more credence to our view of staying sidelined.
On the downside, we would like to see a clear dip below 36.74 before we start assessing whether the bears have gained the upper hand. The ETF would already be below this week’s upside support line, and we may see declines towards Wednesday’s or Monday’s lows, at 36.32 and 36.08 respectively. Another break, below 36.08 would confirm a forthcoming lower low on the daily chart and perhaps pave the way towards the 35.47 hurdle, defined as a support by the low of December 31st.
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