Todd Gordon of TradingAnalysis.com spoke on CNBC's "Trading Nation" about a bearish options trading idea in iShares MSCI Emerging Markets Index EEM.
He noticed the stock broke below its trendline and he expects to see more downside going into the end of the year. Gordon added that the U.S. dollar is contributing to the weakness of the emerging markets. He thinks the U.S. dollar strength could continue as the currency formed a triple top pattern on its chart. If it manages to break out above the resistance, it could continue its move higher, believes Gordon.
To make a bearish trade in iShares MSCI Emerging Markets Index, Gordon wants to buy the October 38/34 put spread for 69 cents. The trade breaks even at $37.31 and if the stock drops to $34 or lower it can maximally make a profit of $3.31.
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