About six weeks ago I did an interview with Ike Iossif on his marketviews.tv podcast. He asked me what I thought looked like a good buy and I mentioned the VNM ETF. I actually highlighted this ETF on this website back in December as something to consider. When I was speaking with Ike it was in the process of coming out of a stage one base, as you can see from this chart.
This ETF could easily go back up to its highs of 2022 in the next twelve months. That’d make for a larger percentage gain than the S&P 500 is likely to make from here to then and is the type of chart pattern that I think one is best to buy into. Emerging markets are coming alive now as global markets are actually outperforming the US stock market this year. I know NVDA is all they talk about, but you can hear about it on CNBC every single hour of the day now. I want to point out to you things you are not hearing about anywhere else and no one talked about this VNM ETF back in December. Yes, it’s an ETF that invests in Vietnam and that might sound scary to people, but the economy in Vietnam is growing faster now than US GDP.
We’re not going into a recession this year. Oil prices and commodities are starting to firm up now. One sector that tends to do well after oil prices bottom and when emerging markets do well is the shipping sector and many shipping stocks, which pay high dividends, are now coming out of stage one bases.
A stage one base is a long-term buy pattern that marks the start of a new cyclical bull market for a stock or sector. It happens when something trades below it’s 200-day moving average for at least six months and then rallies above it. VNM basically did this when it rallied above $13 in June.
Shipping stocks across the board are now doing this.
Take a look at the ESEA stock for example.
The ESEA stock has been below it’s 200-day moving average almost all year, until it too closed above it in June, breaking through its $20 resistance level. Now it’s trading between $20 and $22, a narrow range and a breakthrough of it to the upside would confirm the bullish pattern.
The stock is trading with a P/E of 1.49 and a dividend over 9%.
Another stock in the sector already breaking out is DAC.
DAC is paying a dividend of 4.21% and trading with a P/E of 3.87.
And finally, I will mention FRO for you.
FRO is paying an 11.40% dividend and trading with a P/E of 5.40.
I own positions in these three stocks.
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-Mike
