Looks like China economy has bottomed up and slowly recovering. Both PMI and FXI are telling some bullish stories.
A few bullish signals on FXI chart:
- FXI has broken the resistance of $39.33.
- FXI is trading above 20D, 50D and 200D SMA.
- FXI is showing “Higher High, Higher Low” uptrend pattern.
- FXI is showing a nice Elliott Wave.
- FXI broke out from A Rising Wedge.
Things to Watch:
- Need to wait for FXI to retrace back to about $40 to test the resistance turned support level.
- $40 is an entry level for a bullish trade. (Buy on Dip on an uptrend strategy).
FXI is iShares FTSE/Xinhua China 25 Index (ETF).
Top Holdings* as of 1/3/2013
| NAME | % OF FUND |
|---|---|
| CHINA MOBILE LTD | 9.71% |
| CHINA CONSTRUCTION BANK-H | 8.80% |
| IND & COMM BK OF CHINA-H | 8.01% |
| CNOOC LTD | 6.77% |
| BANK OF CHINA LTD-H | 5.94% |
| CHINA PACIFIC INSURANCE GR-H | 4.26% |
| CHINA LIFE INSURANCE CO-H | 4.25% |
| PING AN INSURANCE GROUP CO-H | 4.20% |
| CHINA SHENHUA ENERGY CO-H | 4.07% |
| CHINA PETROLEUM & CHEMICAL-H | 3.97% |
| Total | 59.98% |
The latest published Manufacturing PMI on Dec 31 is 50.6; a consecutive 2 months expansion.
| HSBC Final Manufacturing PMI 51.5 show the similar 2 months expansion. | |
 |
|
| Note: PMI is economy leading indicator. | |