Let’s preface by noting that like Europe, a trade or investment in China should be backed by one’s own research and opinion as NFTRH+ updates do not tend to include my opinions about the stock or asset class in question. They are simply technical setups on areas that appear to be of interest at a given time.
For much of 2014 and into 2015 we followed FXI (and the FXT index) as it came to a long-term resistance areas (the highest of which is shown as support below) before it finally broke upward into a mini hysteria from which momentum players are now being culled. Daily chart…
The weekly chart shows that support area and another one lower. The fact that daily RSI is not nearly as over sold as it was over bought at the top makes me think there is a chance that the price could get to the 2nd support area at around 38. Weekly RSI looks like it could eventually work its way toward 30 while daily RSI can get to 10-15 and deeply over sold.
FXI is getting to a point however, where it can bounce (1st support). It is also getting to a point where those who are bulls on China for long-term investment might take initial positions or add an increment to existing ones.
That said, for the purposes of this update, we’ll call it a ‘look forward’ like yesterday’s update on Europe, and use the stingy and conservative lower level as a buy.
Buy Target: 38
Sell Target: Undetermined; traders take whatever gains they’d like on inevitable bounces and investors invest (long-term).
Stop Loss: Below 36
A reminder that chart based NFTRH+ updates are just trade setup ideas, which may not be revisited as the parameters are already noted. They are meant as a starting point for further research if interested. Fundamentals-based ideas are also provided for your further research only. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst.