Watching Chinese Names and ETFs - FXI $42 Early Next Week?BABA reports next week 8/3;
likely gives a catalyst for a move up to $210-220 for BABA and then a move for FXI to $42ish
(Opinion only)
FXI trade ideas
FXI: Nice (potential) long tail doji!If the week does end up as a nice long tail doji, then now will be a good time to start accumulating some large cap China stocks!
FXI looking bullish long termA clear long-term ascending triangle pattern.
Breakout of the neckline would send us all the way up to $82
###NOT FINANCIAL ADVICE###
Chinese Stocks May Be TurningThe iShares China Large-Cap ETF had a big run last year, then pulled back and consolidated for 3-4 months. Now it’s showing signs of coming back to life.
Notice how FXI held roughly $45 after forming a kicker candlestick on June 16-17. Looking back to the other lows of May 13 and March 25, we discover an inverted head and shoulders pattern.
Next, FXI squeezed along its 50-day simple moving average (SMA) for the last month. Price action the last two sessions suggests that resistance has finally been broken.
MACD has also been steadily rising since late March. Combined with the mid-May low, this has resulted in bullish divergence.
Finally, the 8-day exponential moving average (EMA) has crossed above the 21-day EMA. The 21-day EMA is also trying to get above the 50-day SMA for the first time since the crash in February. That could signal a more significant change of direction in favor of the bulls.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Asian Bear Markets Signals Corrections in US StocksChinese stocks are entering a bear market. China's holdings are very tech-heavy and mostly internet-based. ex. Alibaba, Tencent, JD, Baidu, Weibo, IQIYI. The Chinese government has concerns over the power these large corporations can wield on their citizens leading to increased regulation. Likewise, the US Government has been closely watching their own tech giants in an effort to reduce their influence. Inflation fears have also affected Tech valuations with these being seen in both Asia and US markets. As inflation rises, nominal rates also rise increasing the discount rate for discounted cash flow valuations. Furthermore, many funds and retail traders are leveraged (margin) in the Asia markets, and once things start to unravel it usually leads to faster declines.
Tech stocks are a leading indicator of the broader market. Semi and Tech dictate the path of the economy. There is a strong positive correlation between semiconductor growth and economic expansion. The semiconductor manufacturing process is expensive and involves large amounts of capital making it more sensitive to changes in interest rates. If China's economy is headed for a downturn then, the world economies will eventually join them. China is a good leading indicator because, the issues that affect China's manufacturing will be felt by the United States, Europe. The past bear markets in China have served as a leading indicator of the direction US Tech Markets will take.
Taiwan is more heavily invested in industrials and manufacturing ex. TSM.
Short FXIFinancials in general are down. With the QQQ crunch, markets correcting, this guy has some room to correct down.
FXI chinese shares under threat of delisting in headlines, bad bad bad sign for investors if shares keep being threatened for delisting. confidence will be shooketh.
#FXI $FXI China Large Cap #ETF . 100 EMA strong support #FXI $FXI China Large Cap #ETFs . 50 EMA strong support Watching.
FXI Short Put (Wheel)Chinese large caps have tumbled over the last couple of weeks and seem to have found support on the rising trendline around $47. The FXI also has a weighted PE ratio of 12.64 which is less than half the SPY's 27. In simple words, you are getting a greater value per dollar in FXI than the SPY.
Trade Idea:
Cash-Secured Put: 45 Strike expiring 4/16 for $0.65 Credit. 75% PoP and $650 BPE for a 10% Max ROC.
Chinese Stocks Have Pulled Back HardThe run-up in U.S. bond yields has squeezed the dollar higher and dragged global stocks lower. This could be creating an opportunity in Chinese stocks.
The iShares Trust China Large-Cap ETF hit a 13-year high of $54.53 on February 17, followed by a sharp pullback in the last two weeks. A few interesting things appear on the chart.
First, FXI has returned to an upward-sloping trend line that began in late September. It’s also near the 100-day simple moving average (SMA) where prices bounced immediately before Christmas.
Next, Fibonacci shows we’ve retraced about 62 percent of the most recent leg up.
Finally, stochastics have returned to an oversold condition.
Given the sharpness of the recent drop, traders could watch for more signs of stabilization before jumping in. However, this could prove an interesting opportunity for longer-term trend followers.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Potential bounce? As FXI enters back into its previous range this could be setting up for a continuation to new highs. The previous range was over 4 months and this is the first retest so barring a downtown in global markets the index should at minimum see a bounce
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.
China top 50 FXI index seems to have formed a triple topPossible triple top with a targeted move towards 37 level. Possible fundamental driver, new lockdowns abroad which damages consumption and demand for Chinese goods.
Technical picture is supported by potential reversal islands at all three tops.
FXI IS CHINA's ETF PLEASE READ WHY THIS STOCK IS GOING UP Chinese GDP expanded by almost 5% on a year-over-year basis ending in Q3 of 2020, signaling sustained economic recovery for the initial pandemic ground-zero.
Believe it or not (and I literally mean "believe it or not"), China seems to be ahead the U.S. in terms of coronavirus recovery. China posted an increase in retail sales of 3.3% in September, compared to U.S. retail sales, which grew 1.9% in September (beating +0.7% expectations).
Even if you're a short-term trader, you should be thinking about the next bigger trend. You want to buy your position when the stock or the fund experiences a short-term decline and looks like it's going to reverse back up.
The ETF is only up by .19 today and the volume is fairly low, however all indicators are showing strong "buy" signals. Today would have been the perfect day to enter the trade but I gathered all the stats after the market closed. It closed at $44.28 and I would not be surprised if it goes up by "Opening Bell" tomorrow especially now with China's COVID STATS published.
Remember all trading involves risk. This an idea and an opinion.
FXI Head and Shoulders bearish patternHead and Shoulders bearish pattern on daily, below the neckline would be confirmation ($41). The november put/call ratio is 2.75! The fib retracement is at the .50 fib level. Keep on eye on this breaking lower . Good Luck!
