Chinese Stocks Have Pulled Back Hard
The 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.
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.
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