EEM Chart – Near Support

I charted the large emerging markets ETF, EEM, late in the day on October 2, 2009 when it was trading at $37.81.  You can see the two lines I drew marking EEM’s trend lines of higher highs and higher lows.  This trading channel is narrowing and I expect the lower line to offer support again.  Aiding in that potential support is the 50 day moving average (dma) in blue.  It’s almost in line with the trend line of higher lows and has acted as support a few times this year, especially over the past two months.  On the bearish front, the 20 dma broke which could act as resistance, just as it provided support through most of April, May and the beginning of June.

Disclosure: I sold naked puts on EEM earlier today at the October 38 strike.  So that shows I expect it to find its footing within the next two weeks.