Chinese Stocks May Be Turning
The 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.
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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.
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