The iShares MSCI EM ETF (EEM) has been under quite a bit of selling pressure over the past four days, dropping it from a close above its 25-day moving average last Wednesday to within shouting distance of its 200-day moving average today. There’s still the possibility that EEM’s support just under 47 earlier this month will provide some technical support, but there are no assurances.
Right now, it looks like emerging market stocks are in a downtrend, which makes it advisable to reduce our exposure by raising a little more cash.
Tonight, we’re going to sell Vipshop Holdings (VIPS), which we bought in mid-February at 18.2. Today’s dip to near 15 tripped our 15% loss limit and pulled the stock below support at 15.6, which halted the stock’s downtrend twice earlier this month. We will sell and hold the cash. SELL.
We will shift our half position in PagSeguro (PAGS) to a Hold rating. The stock made a steep intraday pullback, but rebounded sharply in the afternoon session. HOLD.
Our half position in Weibo (WB), which we sold half of last week, will be kept on a very tight leash.