Last Friday’s (5/29) trading led to a fifth consecutive buy signal for the iShares MSCI Emerging Markets ETF (EEM) and an all-time chart high for the time, before Monday’s (6/1) action brought the fund above $70 for the first time.
Last Friday’s (5/29) trading led to a fifth consecutive buy signal for the iShares MSCI Emerging Markets ETF (EEM) and an all-time chart high for the time, before Monday’s (6/1) action brought the fund above $70 for the first time. This marks the sixth time the fund has given five consecutive buy signals, and the 25% gain through May for EEM is the sixth best start to a year since the fund’s inception and best since 2009.
From a relative strength and trending perspective, EEM has maintained positive long-term relative strength (RS buy signal) against the market as defined by the S&P 500 Equal Weight Index (SPXEWI) since September 2025 and a positive trend on its default trend chart since May 2025. This, along with the push to new highs, has brought the ETF up to a strong fund score of 5.71 (out of 6), just below its November 2025 high score mark (5.72) and to a fund score range not consistently maintained since the mid-2000s.
The rally to new highs has brought EEM, along with other emerging market funds into overbought territory with a Weekly OBOS (Overbought/Oversold) reading north of 90% - its highest reading since February and roughly in line with major U.S. equity indices, like the S&P 500 (SPX). For EEM though, a pullback to the mid $60s would be an actionable level for the ETF with initial support residing at $64, while longer-term support sitting in the mid to low $50s.
Along with EEM pushing to new highs, two notable country ETFs – the iShares MSCI Taiwan ETF (EWT) and iShares MSCI South Korea ETF (EWY) – also rallied to new highs during Monday’s (6/1) trading. EWT gave a fourth buy signal at $98 early last week to close out May before pushing to new highs above $100 in recent days, while EWY returned to a buy signal before similarly moving to new highs. Both ETFs have near perfect fund scores of 5.98 and 5.99 respectively, but their push to highs along with EEM and U.S. equity indices highlights a notable theme.
While semis and broader technology’s rally have influenced U.S. indices, they have similarly helped certain regions and countries within international equities. When examining the holdings of the Taiwan and South Korea ETFs the largest holdings are semiconductor stocks and other tech-related names like Taiwan Semiconductor, Hynix, and Samsung. Additionally, when looking at correlation coefficients for individual countries against the State Street Technology Select Sector SDPR Fund (XLK) and VanEck Semiconductor ETF (SMH), Taiwan (EWT) and South Korea (EWY) maintain among the highest positive correlations with tech, primarily semis, when examining long (10-years) and short-term (90 days) correlations among the broader lineup of iShares country and regional ETFs. Recent trading has only seen those correlations relative to semis and U.S. equities increase, highlighting the influence the semiconductors and broader AI-theme has had on the asset classes pushing to highs.
Similar to EEM, EWT and EWY reside in overbought territory, so those seeking to initiate or add to exposure are best served by looking for consolidation and a normalization of the 10-week trading band before considering. Initial support for EWT resides at $89, while support for EWY sits at $168.
