Good morning,
This week, we’re talking about
Back in September, when the NFL’s worst owner was trying to pump up his China holdings, I discouraged readers from following him into the trade.
That’s been the right call with the iShares MSCI China ETF (MCHI) down 3% since that Monday and suffering a 26% peak-to-trough drawdown in the process.
However, the country’s major ETFs all found support near rising 200-day moving averages and have been working higher over the past month.
More interesting, those recent gains mean they’re showing relative strength vs. the US.
If we think 2025 is going to continue to be a choppy and frustrating year for the US indexes, it makes sense to look elsewhere for opportunities.
Today’s report will review:
Technicals for major Chinese ETFs
The dollar/yuan cross
4 long ideas at the individual stock level
China ETF review
The A-shares remain the weakest
During yesterday’s rally, the next three China ETFs we’re going to look at were all up between 2.6%-3.3%. ASHR was up just 0.6% and the underperformance isn’t a new trend. It’s still below the 200-DMA vs. the S&P 500 and is 25% below its October highs.
FXI knocking on the door of a breakout
FXI is mostly the older, state-owned companies but the chart doesn’t lie. We’re up into the resistance range after yesterday’s gap higher and this base conservatively measures to $45.
MCHI further to go, $57 is the key level
The broadest proxy for China is still 10% below its breakout point, making this a tough entry point tactically.
KWEB going for another try at 3-year resistance
Keep reading with a 7-day free trial
Subscribe to Brown Technical Insights to keep reading this post and get 7 days of free access to the full post archives.