Iran peace deal reopening oil routes — load up on emerging market stocks
Thesis
The US and Iran just signed an interim peace deal, which is reopening the Strait of Hormuz and allowing oil shipments to resume. Lower oil prices act like a massive tax cut for developing countries that rely heavily on imported energy. As a result, money is already flooding into emerging market stocks, pushing them to record highs. With inflation pressures easing globally thanks to cheaper energy, this rally in developing nations has room to run.
Strategy approach
Build a breakout strategy that enters long EEM on the H4 timeframe. Entry conditions: price breaks above the 20-day high (Donchian channel) with an ATR-based expansion (current bar range > 1.5 * ATR(14)). Exit conditions: price closes below the 10-day low or a 5% stop loss is hit. Max hold time of 20 bars.