Money is now pouring back into the sector. According to fund tracking firm EPFR Global, $4.2 billion flowed into emerging-market equity and bond funds for the week ending April 2. And given the recent performance, it's no mystery as to why.
The equity benchmark MSCI Emerging Markets Index is now outperforming the S&P 500 this year. While the S&P 500 is under 1 percent for the year as of Friday, the MSCI Emerging Markets Index is up 1.5 percent.
And, since the lows at the beginning of February—which were ostensibly caused by the worries over emerging markets—the MSCI Emerging Markets Index is up 7.6 percent versus the S&P 500's 4.6 percent.
According to CNBC contributor Gina Sanchez, founder of Chantico Global, the emerging markets' rebound was due to investors realizing that not all emerging-market stocks are the same.
"I had been arguing for a while that emerging markets are extremely cheap," Sanchez said. "There were some great companies that got thrown out, baby with the bathwater. So there were lots of opportunities with emerging markets."
However, Sanchez believes an increased Russian troop presence along the Ukrainian border threatens emerging-markets stocks worldwide.
"You have to be very concerned about things that will take the sentiment out of the market," she said, "because it hits these high beta stocks the fastest."
Mark Newton, chief technical analyst at Greywolf, believes the ETF tracking the MSCI Emerging Markets Index (the EEM) is at a critical level. He sees a pennant formation with a declining resistance line starting from the ETF's June 2011 highs. Rebounds in Brazil and Mexico as well as stabilization in China and Russia helped the EEM move back up to its resistance around $42. The EEM closed at $41.30 on Friday.
"We've risen too far too quickly," he said. "We've gotten up to levels I think are going to be unsustainable at least for the short run. From a trading perspective, I don't think now is the right time to enter the EEM."
Newton sees consolidation, if not a pullback, in the near term. And, he believes geopolitical tensions remain an overhang for emerging markets.
"That's something to consider given the fact that we've rallied almost 4 percent in the last 10 trading days or so," he said.
That said, Newton sees a break above $42.50 on at least two consecutive weekly closes as confirmation of a breakout and a potential move higher.
"The relative charts versus the broader market have been showing some good signs of strength," he said. "But, my thinking is, it's tough to enter here. You want to see at least over the next couple of weeks at least some sign of consolidation. "
To see the full discussion on emerging markets, with Sanchez on the fundamentals and Newton on the technicals, watch the video above.