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Mexico

Buy MXNGBP Gartely - great Risk/Reward and good fundamentalsTechnicals We have a Gartely pattern set up here. I am looking to go long at 0.03697, which falls between the 0.786 retracement and 1.272 extension along with 1:1 ratio between the AB and CD legs. There is also a divergence on the Relative Strength Index from a heavily oversold condition, supporting a spike from around the current price. Fundamentals Slumping oil prices damage the prospect for investment in Mexico’s energy industry, while slowing growth in the US is hurting Mexico more, since the US is Mexico's main export market. However, Mexico has the best economic fundamentals in the emerging market, and is heavily undervalued right now, suggesting either a continued consolidation around the current low, or a rebound from this low. Fundamentally, this is a risky trade and could overshoot into the stop loss, but it could also be potentially very rewarding. Profit target I have set an initial profit target based on Fibonacci levels. I expect the second target to be met, and based on the fundamentals above and how they evolve in the coming weeks I will either move the stop loss up to the first profit target if the second is met, or I will close the trade there.
Long
by olly_price
Talk about rejection! Oil destined for $42.00Talk about rejection! Today we saw some crazy dollar strength. As of 3pm, the dollar had made a 100% retracement or 214 bps round-trip from this morning's ECI drop. The market gave a clear signal that it believes - or rather, more likely, wants , a Fed rate hike. That's all that matters, folks. Oil is heading lower. What's more, the technicals strongly support the move. This week we saw a two day counter-trend rally move oil up 6%. With today's price action, we have a firm rejection of the counter-trend rally, which means the downtrend is still intact and the move lower can proceed. Today, we also saw the futures break below the lows set prior to the counter-trend rally, a level that also corresponded with the 76.4% fib retracement of March's rally to 2015 highs. 100% is the next fib retracement level at 42.00, which falls within range of a fib extension zone b/w 41.55 and 43.25. The pace of the current downtrend from late June predicts 42.00 within 13 days. Keeping in mind the absolute and relative low levels of oil volatility (versus other asset classes) could cause that move to come much faster. A long vol, bearish options strategy might be a useful way to play the move. Next week I plan to take some profits in my 45 puts and roll into shorting the futures directly. Also, keep the Mexican Peso on your watch list. My macro thoughts are OIL --> CAD --> MXN.
FX:USOILShort
by simonsays452
1
Mexican Stocks -17% In 6 Months, But Are Showing Signs Of LifeThe iShares MSCI Mexico Capped ETF has sustained its longest move above the 50-day EMA since September (prior to breakdown). If EWW is able to close above the 2015 resistance level at $60.50, look for a continuation to the $63-$65 area in the next 1-3 months. An initial stop loss on a stock position can be placed under $58. Option traders can consider buying the Apr 20 $60 calls or $60/$63 bull call spreads upon that confirmed breakout. Top ten holdings in the ETF (62.85% of assets): America Movil, Grupo Televisa, Fomento Economico, Grupo Financiero Banorte, Cemex, Wal-Mart de Mexico, Grupo Mexico, Fibra Uno Admin., Grupo Financiero Inbursa, and Alfa The Mexican economy has had to deal with plunging oil and peso prices in the previous months. Tepid results from Wal-Mart de Mexico and Coca-Cola FEMSA have reflected this too. While the economy has been growing in a roughly 2.5% range (in terms of GDP), economists are more positive for 2015. The collectively group see GDP at +3.2% for the year and Mexico's Ministry of Finance looks for 3.2%-4.2% growth.
AMEX:EWWLong
by MitchellKWarren