Are Peruvian stocks primed for a breakout?
Sep 26, 2018
- iShares MSCI All Peru Capped Index Fund (EPU), the ETF that tracks Peruvian stocks, has generated YTD returns of –9.44%.
- EPU’s RSI is neutral indicating the ETF is neither overbought or oversold, although EPU recently recovered from a very low RSI earlier this month indicating the ETF was oversold.
- EPU’s bull run leading up to the beginning of 2018 can be attributed to consistent GDP growth of 3%+ from the beginning of CY2016 through the end of CY2017 (with the exception of 1Q2017, where EPU experienced a sell-off ).
- Peru’s spike in GDP growth in 4Q2015 helped drive the beginning of EPU’s bull run, as both of these events occurred around roughly the same time.
- Peru’s GDP growth came in at roughly +2% for 2Q2018. If Peru can see GDP growth return back to 3%+, EPU may be poised for a breakout.
Peru - Real GDP Growth 2013-2018