The MSCI Emerging Market index has formed a Golden Cross for the first time in a year, reflecting the possibility of a sharp upward movement for the market. Also, bearish trades in the form of shorting of derivative contracts by emerging market exchange funds have dropped to the lowest in one and half years. In the last three months, it gained 11.2% compared with 10.8% of the MSCI EM index. The 50-day moving average in case of the Nifty is currently 3% below the 200-day average. A regional analysis shows that most of the major emerging markets are witnessing the Golden Cross pattern following reduced volatility in currencies and rebound in the commodity prices.

Source: Economic Times May 12, 2016 19:37 UTC