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The FXI (ETF for China) finished last week in the green to put icing on what has been a tremendous run since September. Logically, you would think the high beta emerging markets would get sold hard in the midst of a sudden Fiscal Cliff panic, coupled with persistent weakness in the likes of Apple.
Instead, Chinese stocks continue to trade in their own world.
Even beaten-down Baidu, which has been in a seventeen-month downtrend, may be setting up for a long here. Note the weekly chart below (the first one), indicating a pullback to the 200 period weekly moving average. That is a major, very long-term reference point that had not been tested since early-2009.
However, that alone is not enough to justify a long. Instead, looking at the daily timeframe on the second chart, you can see a pretty clear-cut inverse head and shoulders bullish setup for a bottom. I would wait for a move above $103 to trigger a rally up to roughly $116.
3 Responses to Even Bottom Dwellers in China Popping Up
How much do you want to bet that dude over at The Street subscribes to your weekly newsletter, great idea(s) and analysis within..,Chess.
Posting article today..hmmm? I just happened to catch it as I rarely go to those pages.
*lights out over @ pickr..maybe they have finally put it out of misery.
Damn me for being such a creature of habit.
I did start a position this am
lights back on..wallowing in misery.
most fun ever these past 3yrs
*not referencing Bidu^ ..no position