Rallying gold and other metal prices have had impacts across assets across the globe, among those being regions with major dependencies upon mining said metals
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Rallying gold and other metal prices have had impacts across assets across the globe, among those being regions with major dependencies upon mining said metals. The major players that have seen notable upside action in September along with precious metal prices are Africa and Latin America. Technical improvement for both regions can be seen in DALI’s rankings and Asset Class Group Scores (ACGS) page. Africa Mideast and Latin America improved to 2nd and 4th (out of 6) within the NDW DALI International Rankings in the back of the third quarter, and both groups are scoring above 4 on the ACGS page and near historic highs marks at 4.78 (Middle East Africa Equity) and 4.73 (Latin America).
Broad representatives for the regions the VanEck Africa Index ETF (AFK) and iShares S&P Latin America 40 ETF (ILF) have maintained positive trends since May and given consecutive buy signals as they’ve rallied to recent highs. AFK now resides at its highest level since 2018, while ILF sits at a fresh 52-week high. After adding 7% in September, AFK is up more than 55% for the year so far and maintains a strong fund score of 5.89 (out of 6). Meanwhile, ILF is up 37% year-to-date after picking up 6% in September and possesses a fund score of 4.06. Given their overbought positioning on their point and figure charts, exposure to AFK and ILF could be considered on pullbacks toward the middle of their 10-week trading bands – AFK at $22.50 and ILF at $27.50. Initial support for AFK resides at $19 on the default point and figure chart, while support for ILF sits at $25.
From a country perspective, Peru and South Africa led the way with the iShares MSCI Peru and Global Exposure ETF (EPU) and iShares MSCI South Africa ETF (EZA) rallying 13% and 10% respectively. EPU is up more than 50% on a year-to-date basis and trades at an all-time chart high at $60, while EZA has also added 50% year-to-date and trades at its highest level since 2018. Like their broader representatives above, EPU and EZA have maintained positive trends on their point and figure charts since earlier this year and given consecutive buy signals, with their most recent breakouts coming in August prior to their rally to recent highs. Both ETFs maintain near perfect fund scores of 5.95 (EPU) and 5.83 (EZA), highlighting their positive trending and relative strength characteristics, but trade in overbought territory with Weekly OBOS readings north of 100%. Exposure to EPU would be better considered in the mid-$50 range, while EZA could be considered on a pullback to $60. Initial support for EPU lies at $53, while support for EZA can be found at $48.
