From yesterday’s trade log: “I am going to choose to imagine a large Cup & Handle on the FXI weekly chart and buy it.”
Before getting to the technicals, I want to note that the idea of casting our view globally is also supported by the developing taxation situation in the US, with Yellen most recently jawboning corporate tax increases. Also, we noted in NFTRH 655 that the China A-Shares were looking suspiciously constructive and possibly positively guiding the large caps (FXI).
First the daily chart, which has been looking pretty bad after breaking down through the moving averages. It became oversold and the idea would be that it’s an oversold shakeout similar to September, 2020, which developed into a nice ‘V’ shaped recovery.
The weekly Cup & Handle was the main reason it was added, however. The Cup’s right side is higher than the left, which I always want to see. Then a Handle took shape and eventually dropped far enough to test lateral support. Hence the buy. Momentum traders would not want this, but bottom feeders like me would. A handy stop loss would be a takeout of the May low at the EMA 100 (43.54). The theoretical measured target is 74. If that were to play out it could be over many months or even multi-years.
A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the technical parameters are already noted. These updates are meant as a starting point for your further research if interested. I will not personally buy every item highlighted and will sometimes sell (ref. Trade Log) any item that I do buy below target (assuming I’ve not stopped out or sold for some other reason) as I often do. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.