Are Chinese Stocks Breaking Out?
Several positive things have happened in China lately. The Asian country’s coronavirus cases have remained low and economic data has been strong. Just today, the Caixin manufacturing index had its biggest gain since 2011.
That’s helped push the
yuan to its highest level against the U.S. dollar in over 1-1/2 years.
The other big story has been the rise of China as a financial center, which we saw in last week’s successful Ant Group initial public offering. Interestingly, Chinese technology stocks like Alibaba and JD.com remained near highs last week – even as U.S. peers crumbled. (Three of the Nasdaq-100’s six gainers last week were Chinese: Pinduoduo, JD and Netease.) Also consider Nio’s massive outperformance versus Tesla recently.
We’ve covered Chinese technology stocks several times. Today we’re looking at China’s non-tech stocks: the iShares Trust China Large-Cap ETF.
FXI has a long-term resistance area between $45 and $46. It was support in the first half of 2018, and then marked the top of its range in April 2019, January 2020 and again last July. Now two chart patterns suggest a breakout may be coming.
First is the downward channel over the last four months. FXI broke above it in mid-October and held the top of it last week.
Second is the increasing relative strength in recent weeks, seen in our custom Smart RS indicator here.
Traders may want to keep an eye on FXI if it keeps pushing toward $45.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
That’s helped push the
yuan to its highest level against the U.S. dollar in over 1-1/2 years.The other big story has been the rise of China as a financial center, which we saw in last week’s successful Ant Group initial public offering. Interestingly, Chinese technology stocks like Alibaba and JD.com remained near highs last week – even as U.S. peers crumbled. (Three of the Nasdaq-100’s six gainers last week were Chinese: Pinduoduo, JD and Netease.) Also consider Nio’s massive outperformance versus Tesla recently.
We’ve covered Chinese technology stocks several times. Today we’re looking at China’s non-tech stocks: the iShares Trust China Large-Cap ETF.
FXI has a long-term resistance area between $45 and $46. It was support in the first half of 2018, and then marked the top of its range in April 2019, January 2020 and again last July. Now two chart patterns suggest a breakout may be coming.
First is the downward channel over the last four months. FXI broke above it in mid-October and held the top of it last week.
Second is the increasing relative strength in recent weeks, seen in our custom Smart RS indicator here.
Traders may want to keep an eye on FXI if it keeps pushing toward $45.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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