It was only ten days ago that I thought I would be provocative with an early call on China in Time to Be Long China? Since that time, what looked like a possible cessation in downside momentum has turned decidedly more bullish, with the FXI rising an additional 10%.
The chart below shows FXI, the iShares FTSE/Xinhua China 25 Index ETF, closing above its 50 day simple moving average (SMA) for the first time in 4 ½ months yesterday. It has been 27 trading days since the FXI put in a bottom. Since that time, the Chinese ETF has rallied more than 40% off of that bottom.
If FXI can close above its 50 day moving average again today, it will mark the first time in over six months that FXI has closed above that important technical level on consecutive days. Ten minutes into today’s session, FXI is trading at 26.70, down 0.55. With the 50 day SMA at 26.94, any close at 27.00 or above should leave a fairly bullish signal on the chart and support the case for increasing upside momentum.