A megaphone has emerged in the iShares MSCI Emerging Markets

The $EEM ETF is widely followed and has formed a very interesting pattern in 2013: the Broadening Wedge or Megaphone. Here is the Daily chart to illustrate this:

EEM_megaphoneSeveral things to note here:

  • The lows in April almost saw RSI tough the key 30 level but since it has drifted up and is approaching the 70 level
  • As price moved up in May, volume has declined
  • The 50 Simple Moving Average looked headed to hook up with the 200 but is now curling back up

For some more perspective, let’s take a look at the PnF chart:

EEM_PnF_BA print at 45 will set up for a Double Top Breakout. A bull PO of 61 remains.

For more information on the Broadening patterns, take a look here at what Bulkowski says.

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