Emerging markets are about to break out, Oppenheimer analyst says, and here's how to play it

Emerging markets have been underperforming the S&P 500 this year, but Oppenheimer's Ari Wald sees a bullish development that stretches back to 2007.

"The key point to our view here is that equity markets are broadening on a global scale," Oppenheimer's head of technical analysis told CNBC's "Trading Nation" on Monday. "We have the U.S. still working, Europe breaking through 21-year resistance and emerging markets as well pushing on the door of a 14-year breakout trend," he said.

The EEM emerging market ETF moved to all-time highs earlier this year, surpassing a high set in October 2007. Wald sees the ETF heading back to attempt another breakout. It is currently 5% below that mid-February 2021 peak.

"As long as that ETF is above support at $52 — that marks both its March low as well as its 200-day average — as long as you're above there, I think ultimately you do get a more definitive breakout to a new high over the coming months," said Wald.

The EEM ETF closed Monday at $55.71 a share.

Wald pinpoints China Petroleum & Chemical as one stock that could ride the upswing.

"It is still about 40% of what it was trading at back in 2018, and we're in the process, we think, of reversing this multiyear decline. There's support at the 50-day average at around $53, and I think as long as you're above there, this stock makes its way into the low- to mid-$60s," he said.

China Petroleum closed Monday at $55.08 a share.

Nancy Tengler, chief investment strategist at Laffer Tengler Investments, says it pays to be pick in the space. She highlights Chile as among three of her favorable regions in which to invest.

"Chile is the dominant provider of copper, producer of copper, around the globe and they've been very effective in vaccinating their population, 3.5 million out of 19 million, … and the financial institutions are strong. So we like Chile here," Tengler said during the same interview.

The ECH iShares Chile ETF, which gives exposure to the Chilean market, has come under pressure in recent months. It has fallen nearly 20% from an April high.

"Then we've had some of an overweight in China … and then in Taiwan, and that's driven largely by our bullishness on Taiwan Semi. So I think there are select places you want to be," she said.

Disclosure: Laffer Tengler Investments and Tengler hold TSM.

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