Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Compelling China Stock Market Charts

/ China Stocks Aug 02, 2010 - 10:04 AM GMT

By: Mike_Paulenoff

Best Financial Markets Analysis ArticleIn our video charts this week we cover a range of market topics beginning with August's historical event risk and moving on to bonds and deflation (minutes 6:31 to 12:30), the S&P 500 and DXY (12:31 to 19:25), and gold and silver (19:26 to 27:36). The big opportunity described this week is China (27:37 to 38:54), with the last part of the video dedicated to Australia (38:55 to 45:00), which could benefit from the China move.


Let’s take a look at China where some very interesting things seem to be happening. Beginning with the Shanghai Composite Index (SHCOMP), it had a July low of 2335 and closed at 2637, a banner month. It closed the month above its upturned 20-day moving average and upturned 50, and the 200 is flattening out way up at the 2955 level.

Keep in mind, the Shanghai peaked in August 2009 and has been going down for almost a year. There’s a pretty good chance that the last move down completed the entire correction. If so, then the Shanghai is about to take off.

On the weekly chart, the longer-term situation shows that the Shanghai had an upleg from late 2008, finished its correction a year ago about two-thirds of the way back, and now it’s ready to take off. Certainly, the weekly oscillators are telling me that something is going on that's very powerful in the Shanghai Composite.

My last posting on the site on Friday was a candlestick chart of the monthly, which is a pretty exciting chart from a big-picture perspective. On the bar chart basis, the key upside reversal that occurred looks like it has finished something and it's going to make a run on the upside. If that happens, it's probably going to be very positive for both Chinese stocks as well as some of the U.S. stocks.

Looking at the iShares FTSE Xinhaua China 52 Index Fund (FXI), it looks better than the Shanghai. It didn't have quite as steep of a decline. It did peak in November 2009, but looks poised to take off. It closed at 41.25, and 43.25 would be its next target. That’s almost a 10% upmove, which would be very powerful. We'll have to consider getting into it for the site.

Let’s take a look at some of the Chinese stocks inside the FXI. China Mobile Limited (CHL) is, in fact, 10% of the FXI. Although different from the Shanghai Composite’s chart, it has a good-looking chart. Actually, it peaked last August, too. Since then it has a base between around 45 and 52, where there's a resistance line, or neckline. It closed at about 50.94, so if it breaks above 52, there can be a pretty big move in China Mobile.

The weekly on China Mobile is a really impressive chart. It may be a little difficult for it to reach 75, but 65 may be attainable from 55, where it's currently at on the chart. That would be an 18% move. So, keep China Mobile in mind as a reflection of both an upmove of the China market and perhaps some resurgence in growth of China, which is perceived to be slowing down.

Sunday night's expected PMI report from China has investors eyeing the 50 level -- whether it will stay above or fall below 50. These charts are telling me that the PMI will probably be okay.

China Life Insurance Co. Ltd. (LFC) has a similar situation, with a nice-looking chart pattern. It finished a correction, coiled up, and is ready to take off. It closed at 67.17, and the trendline is at 69.50. If it breaks out here, it should retest the April high at 75.

The weekly looks really good, with everything turned up. It has a little base and correction of the long-term upmove, which it looks like it will continue. So, this one, too, is one to keep on your radar screen as an instrument or vehicle to take advantage of the China upside reversal.

CNOOC Ltd. (CEO) looks pretty bullish on a weekly as well as a daily chart, with higher lows and a flat top that looks like it wants to move up and test the 181 level from 168. If it gets through, it looks like it will test the highs up around 205. So, this is another one to keep an eye on.

Aluminum Corporation of China Limited (ACH) had a pretty big correction in January when it peaked, built a base since May, had a triple bottom around 18, and now it looks like it’s about to breakout based on Friday’s close, which is in keeping with the way the Shanghai Composite and the FXI closed. This is another stock that needs to be considered.

Baidu, Inc. (BIDU) looks like it’s going higher, possibly to 90. Of course, the risk up here is greater with Baidu.

Shanda Interactive Entertainment Ltd. (SNDA) looks okay, but not quite as good as the others. On a weekly chart, you can see all the work that it did on the downside since June 2009, It’s been stair-stepping down, and it’s no coincidence that it came down to the extension of the prior resistance line. Now, it could really take off. The oscillators are telling us that Shanda is probably sold out on the downside. The question is how much upside is there to follow. At the very least, this is another one that has had a correction in the bull market from way back and appears ready to embark on another upmove. The move should reach the highs around 55, which from its close at 40 would be another sizable gain out of China.

Sign up for a free 15-day trial to Mike's ETF & Stock Trading Diary today.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

© 2002-2010 MPTrader.com, an AdviceTrade publication.  All rights reserved. Any publication, distribution, retransmission or reproduction of information or data contained on this Web site without written consent from MPTrader is prohibited. See our disclaimer.

Mike Paulenoff Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in