Emerging-Market Stocks Nearing Threshold of a 20% Rally: Chart

Developing-nation stocks are closing in on a threshold that could herald a 20 percent rally, as the MSCI Emerging Markets Index is poised for a bullish technical pattern called inverted head-and-shoulders. If the gauge crosses 850, it can climb to as high as 1023, a level last seen in May 2015, according to Andy Dodd, an analyst at Louis Capital Markets UK LLP in London. Gains from the pattern are predicted by calculating the difference between the measure’s lowest point and its so-called neck line.

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