Home > charting trendlines > CH ahead of itself?

CH ahead of itself?

If one is a short term trader interested strictly in capital gains, it would appear that CH (Aberdeen Chile CEF) is well ahead of itself as compared to ECH (iShares Chile).  Aberdeen reports that as of 3/23, CH was trading at a premium of almost 15%.  Even considering its 8%+ yield and an ex-div date less than a week from now (3/29), the premium seems pretty excessive.

CH is also coming back up on the underside of its rising trendline from 2009.

Between the 15% premium and the possible trendline resistance, it seems like a decent time to harvest the 15% CH gain from the last month.

Longer term, things look pretty sunny for the Chilean market.  An upcoming dip could be  a nice buying opportunity.  The 50 day EMA has just risen back above the 200 day EMA (10% below the current price).  A number of “emerging” markets have recently broken to the upside of falling resistance trendlines.  ECH – which I view as a more natural view of where CH should be – has done so as well, breaking to upside of its falling channel:

It seems reasonable to expect to CH to consolidate and give back some of its outsized gains relative to ECH in the next two weeks.  For a short term trader, this would seem like a good time to lock in profits on CH.  For a longer term investor looking for yield and emerging market exposure, the next few weeks may present a decent buying opportunity.

  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: