BRIC Ready To Rollover, Play This ETF On The Downside (EEB)
It seems like only yesterday that emerging markets and BRIC ETFs were all the rage. Well, times change quickly. Bad China news didn't help. Sprinkling in weak commodities prices and Greece's flirtation with financial disaster haven't helped matters.
None of this is good news for the Claymore/BNY Mellon BRIC ETF (NYSE: EEB). Despite the fact that EEB represents BRIC, it is heavily concentrated in Brazil and China. Given the aforementioned factors, it's no wonder EEB has been such a slack performer in 2010.
The fact that more than 45% of the ETF's sector weight is in energy and industrial materials isn't helping matters.
The ETF is already down 12% year-to-date, but the charts show more pain may be in the offing. If you want to call $37 support because it's a round number, that's fine. Be aware that if $37 doesn't hold as support, $27 could be the next stop.
Oddly enough, open interest in the March puts at the $37 strike and below is almost non-existent and premiums appear reasonable if you're willing to go a couple of bucks out of the money.
