Get started
ISHARES TRUSTISHARES TRUSTISHARES TRUST

ISHARES TRUST

No trades
See on Supercharts
Overview Analysis News
Ideas
Discussions Technicals Seasonals

FXI trade ideas

FXI: China Large Cap ETF Critical JunctureEven in retirement I scour hundreds of weekly and monthly charts. When I come across promising setups, I drill down to see if there are chart elements, price volume relationships, or other factors that might either preclude a trade or tip the odds heavily in favor of a particular outcome. Most of that process is covered in the "Potential TLT inflection and Notes on Process" post linked below. FXI, is the China Large Cap ETF that holds the top 50 large cap stocks trading on the Hong Kong exchange. It is currently testing long term support. The outcome of the test is likely to set the stage directionally for the remainder of the year. While I came away from my analysis with a bearish view, this is also precisely the kind of setup around which I build mostly agnostic trading plans. Fundamentally, there isn't much currently going on in China that leads me to optimism. China is a command economy run by a communist regime that is in the process of retreating from capitalism. Importantly, they seem to be increasingly resistant to stimulus. In the near term, the Zero Covid policy is still in effect and the property and construction sectors are in crisis. To that list you can add a rapidly aging population, a world increasingly resistant to buying from their goods, a rethinking of global supply lines and significant raw material and climate challenges. Granted, there are positives. They are becoming a chip superpower, and over the last two years have made some very significant technological advances. But, my in my view, the negatives outweigh the positives by quite a lot. In early March, as price was punching through the range support, Vice Premier Liu He promised to keep equity markets stable, and that the crackdown on the tech sector would end soon. The promise created one of the strongest two-day rallies in years. Clearly, if China chooses to massively stimulate and overtly support their equity market (perhaps through direct purchase of equity) it would be a game changer. But, despite Liu He, I think pessimism is warranted. That said, as students of the market, we understand that narratives drive markets, until they don't, and then new narratives, evolve to explain the new price action. Those of you familiar with my work know that I maintain a macro view on most markets. That view, informs my aggressiveness and risk tolerance, but, if a techncial setup provides a clear risk reward advantage, it does not deter me from making trades that don’t conform to the view. FXI is setting up exactly that situation. Either it survives the test of the range lows, and sets up for potentially a 20-25% move higher, or fails and sets up what could be an even larger move lower. Either way, I will have a trading and risk management plan in place, no matter the directional outcome. FXI Weekly: Since the March climax and automatic rally (AR) the market has traded laterally for 24 weeks and defined a trading range. Whether the range is one of re-distribution or of accumulation is an important, but difficult, question. In this perspective the selling climax structure holds up, with a clear/classic high volume reversal bar. But, the follow through (AR) over the next two weeks was meager and volume still quite high. The combination of high volume and narrow price spread suggest that the market was already running into significant supply. The Wyckoff selling climax sequence includes what he called the "automatic rally" (AR). The AR occurs as immediate sellers are cleared out by the selling climax. Some strong handed, proactive traders take new longs creating some nascent demand. I prefer to see the AR cover a significant distance. In my estimation, a weak AR represents a sign of weakness. To become constructive, the market must, at a minimum, break above the A-B downtrend. That downtrend represents the stride of supply. It must also move convincingly above the lateral resistance along the 34.83 zone. It is notable that FXI, has yet to complete a solid test of the low. I prefer tests well separated in terms of time that come close to fully retracing the climax structure. Failing this, a sign of strength above the high of the automatic rally (34.83) would suffice to suggest that a good bottom was in. If that level is exceeded, entering bull flags and other corrective style drift patterns would become part of my approach. I have included a long-term volume profile on the chart. If the market does begin to work its way above the lateral resistance, the huge volume bulge in the 42.00 zone should act as strong resistance. 42.00 is also in the vicinity of the .50 - .618 retracement zones. FXI Daily: In this perspective the selling climax appears very different. After gapping through the support, volume increased significantly and price spread narrowed somewhat (suggesting at least some developing demand). The Liu He statements gapped the market 10% higher and left behind an island reversal gap. In this perspective it becomes clear that the exhaustive volume wasn't generated in a typical selling climax fashion, but rather after the gap and near the highs. In my view much of the volume was generated by strong handed sellers selling into the strength AFTER the market gapped higher. This is clearly an atypical selling climax and tempers any enthusiasm generated by the violent rebound evident on the weekly and monthly chart. It is also notable that the lateral trade since the March low have relieved the oversold conditions that had accrued at the March low. Relative Strength Ratio Chart: This is a weekly relative strength chart, comparing FIX (the numerator) to world markets URTH, (the denominator). It is somewhat skewed because URTH is not ex-China. In other words, China is included in both numerator and denominator, skewing the ratio. However, over the last decade, China has consistently underperformed. To become optimistic for anything beyond a trading turn would require the Chinese market begin to markedly strengthen relative to the rest of the world. I often take a quick look at the larger components of any ETF I am thinking about trading. As I look through the top eight large cap names in the ETF I see few signs of a solid bottom or charts that appear ready to rally. One last thought, in the process piece linked below my final step is the sanity check. Am I falling prey to behavioral bias? Am I being dispassionate? Is my belief system compromising my impartiality? I have to conclude that in the case of China, that it may well be so. I don't like the Chinese government and am loath to invest there for anything other beyond a trading turn. Historically, command economies that are becoming less free tend to make for lousy investments. They are also subject to step function changes due to changes in policy, wrecking risk management overlays. Clearly my strongly held view may compromise my read of the FXI chart. Because of this I will need pay greater than normal attention to how I build my trading plan. Conclusion: I believe that the weight of the evidence suggests the presence of superior supply and supports the likelyhood that, once the oversold is removed, FXI falls through the bottom of its longer-term range. Clearly if the Chinese add stimulus or perhaps buy equity directly, the game/narrative could quickly turn and I will need to adjust. But as I build my trading plan I will be more much aggressive on the short side of the market. And finally, many of the topics and techniques discussed in this post are part of the CMT Associations Chartered Market Technician’s curriculum. Good Trading: Stewart Taylor, CMT Chartered Market Technician Taylor Financial Communications Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
Editors' picks
AMEX:FXI
by CMT_Association
25
FXI / Nasdaq Relative Strength & Correlation China's Large Cap ETF (FXI) is showing notable bullish Relative Strength (RS) compared to the Nasdaq (0.26 on the Daily RS, using a 50 period timeframe). The typical RS between these two fluctuates between -0.15 - 0.10. FXI also tends to have quite a strong correlation coefficient vs. NDX, but we're finally seeing that break down (0.24 on the Daily w/ a 50 length and trending down). Conservative swing traders want to see a breakout above ~$34 for longs, which would clear the downward sloping trendline that FXI has been respecting since early 2021. While there's still geopolitical risks associated with trading Chinese equities (e.g. tensions with Taiwan), China's recent dovish tilt is encouraging for swing-trading speculators. AMEX:FXI NASDAQ:NDX
Editors' picks
AMEX:FXILong
by Michigandolf
13
Something Bullish Could Be Happening in ChinaU.S. stocks fell into a “bear market” this week. Meanwhile, a new bull market could be starting across the Pacific. This chart shows the iShares China Large Cap ETF with relative strength compared to the S&P 500. FXI lagged the U.S. benchmark consistently between February 2021 and May 2022. But it’s outperformed in the last month as officials in Beijing lend support to the business community . As many traders know, a bear market starts when an index drops 20 percent from its high. A lesser-known definition from S&P states that a bull market begins with a rebound of 20 percent from the low. By this definition, China exited its bear market earlier in June. Perhaps even more interesting is the strength of China’s burgeoning technology sector – especially with the Nasdaq-100 reeling lower. This second weekly chart features the Nasdaq Golden Dragon China Index, which holds major companies like Alibaba and JD.com. Notice how it appears to have broken a falling trendline. Second, HXC’s relative strength histogram is pegged to the Nasdaq-100, home to major names like Apple and Microsoft. Its recent outperformance was the highest in 17 years of history. The divergence is noteworthy because Chinese tech stocks have typically behaved like high-beta versions of their U.S. peers. This time they’re trying to break out at the same time a hawkish Fed hammers Silicon Valley valuations. Traders may want to consider whether a bigger rotation is underway. TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more. Important Information TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means. This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates. Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com .
AMEX:FXI
by TradeStation
Zigzagging FXI.Goals33, 32. Invalidation at 47 . We are not in the business of getting every prediction right, no one ever does and that is not the aim of the game. The Fibonacci targets are highlighted in purple with invalidation in red. Fibonacci goals, it is prudent to suggest, are nothing more than mere fractally evident and therefore statistically likely levels that the market will go to. Having said that, the market will always do what it wants and always has a mind of its own. Therefore, none of this is financial advice, so do your own research and rely only on your own analysis. Trading is a true one man sport. Good luck out there and stay safe
AMEX:FXIShort
by Rykin_Capital
A Spectacular Dip Buy Chinese Stock Exchange Chinese #FXI Large Cap ETF ready for a dip buy around here and I will be watching for the triangle to breakout above the red line. Here are the top 15 holding of the ETF: Symbol Holding % Assets 3690 Meituan Class B 9.51% 700 Tencent Holdings Ltd. 9.08% 9988 Alibaba Group Holding Ltd. 7.49% 939 China Construction Bank Corporation Class H 5.92% 9618 JD.com, Inc. Class A 5.39% 2318 Ping An Insurance (Group) Company of China, Ltd. Class H 4.21% 1398 Industrial and Commercial Bank of China Limited Class H 4.11% 9888 Baidu, Inc. Class A 4.06% 2269 Wuxi Biologics (Cayman) Inc. 4.02% 1810 Xiaomi Corp. Class B 3.39% 1211 BYD Company Limited Class H 3.31% 9999 NetEase, Inc 3.29% 3968 China Merchants Bank Co., Ltd. Class H 3.05% 3988 Bank of China Limited Class H 2.69% 2382 Sunny Optical Technology (Group) Co., Ltd. 1.92%
AMEX:FXILong
by bartuclk
1
China LArge Cap ETF short term boost to higher highs. FXIAppearing to be a beginning of the Y in WXY in an otherwise complex correction. This is just a result of just the same as nothing can grow exponentially, nothing will fall unstoppably without seeing some respite from time to time. We are not in the business of getting every prediction right, no one ever does and that is not the aim of the game. The Fibonacci targets are highlighted in green with invalidation in red. Fibonacci goals, it is prudent to suggest, are nothing more than mere fractally evident and therefore statistically likely levels that the market will go to. Having said that, the market will always do what it wants and always has a mind of its own. Therefore, none of this is financial advice, so do your own research and rely only on your own analysis. Trading is a true one man sport. Good luck out there and stay safe!
AMEX:FXILong
by Rykin_Capital
FXI, Immediate term trade and trendSignal didn't like FXI for a long time now. I have been short. And now it seems like there will be another short opportunity?? I will be keeping an eye on this PS. Each box span a day, and the code gives short term and long term trends as shown. the trend is shown with the color of the box. The range is calculated on a daily basis. If you want similar ranges and trends on your ticker, feel free to contact me, I will add them to my list and provide them when the signal is interesting (for free of course) Redd
AMEX:FXIShort
by reddan256