From Taki Tsaklanos: One of the few silent uptrends in global stock markets is the one in China. InvestingHaven forecasted almost half a year ago that China’s stock market will go much higher in 2017. That forecast was spot-on. It appears now that this uptrend has (much) more legs.
This article on Investors.com noticed recently how China’s stock market moved higher alhtough US stocks were calm. Nasdaq.com adds to it that “the global forecast for the Asian markets [China’s stock market in particular] is upbeat thanks to easing geopolitical concerns and a bump in the price of crude oil.”
MarketWatch makes an explicitly bullish call (though cautiously) on Chinese stocks: “If you are increasingly worried about overreliance on U.S. stocks and looking to either hedge your bets or diversify into other areas of opportunity, the landscape is increasingly looking favorable for China stocks once more.”
The Guardian calls is the ‘Trump trade’, and refers to a rising stock market in China and Japan because of a commodities-friendly policy by Mr. Trump.
China stock market silently moving higher
No matter what you would like to call it, Trump trade or wall of worry, the fact of the matter is that China’s stock market is heading higher.
The Shanghai exchange, which is shown on the chart, made a silent but important breakout in November last year, as suggested by the exceptional chart pattern. The more silent a breakout, the more important it is.
InvestingHaven’s research team wrote in November that smart investors are buying this breakout, and it appeared to be spot-on.
As long as the Shanghai index remains above the rising trendline which started in June 2014, the market in China is in a long term uptrend and is considered to be BULLISH.
The FXI ETF which holds large corporations in China is one of the ways to play a rising China stock market.
The iShares FTSE/Xinhua China 25 Index ETF (NYSE:FXI) rose $0.41 (+1.07%) in premarket trading Wednesday. Year-to-date, FXI has gained 10.17%, versus a 4.55% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Investing Haven.