Following a recent trip to Buenos Aires, America’s “Iron Man” Elon Musk said investors should put money to work in Argentina.

Is he right?

For starters, the market looks to be in a risk-on moment. Argentina is pretty risky, so the risk-on trend is Argentina’s friend.

Global equities reached an inflection point on April 19. That was when Iran signaled that it was not going to climb the escalatory ladder with Israel over Tel Aviv’s response to the October 7 terrorist attacks by Hamas against civilians attending a music festival not far from the Gaza strip.

Back to Argentina.

Conservative investors rarely like chasing a great story. Argentina is one of those stories. The Relative Strength Index for Argentina, which measures stock price momentum, is showing the Global X MSCI Argentina (NYSE:ARGT) ETF overbought at 79. Anything above 70 signals an overbought situation.

Is Argentina Worth Chasing?

Labor reform failures this year had no impact on the ARGT ETF, which is up 24% as of market close on May 8 compared to 8.8% for the S&P 500 and 5.1% for the iShares MSCI Emerging Markets Index (NYSE:EEM).

“Maybe the Argentina sell-off news comes along the lines of Milei having to water down more of his policies,” Signorelli said. “ARGT has such high momentum right now, it can easily be knocked off its pedestal by something geopolitical like oil hitting $100 as that could force the Fed to raise rates. And if the U.S. slows, that’s a headwind for ARGT.” 

There are some fears that an incursion into Rafah by Israel could spook the market near-term.  A full-scale invasion could lead Iran-backed Hezbollah to get involved from Lebanon on the northern Israeli border.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.