Is it Time to Enter the FXI?
Timing is the word when it comes to trading the iShares FTSE/Xinhua China 25 Index (FXI). The FXI is never meant to be a long term holding, then again, nothing is these days.
THE DRAGON ROARS BACK
The FXI has increased 16.4% since Oct 4th and today it trades at around $34.55 a share. The FXI has a 52-week range from $28.61 to $46.40. The fund is made up of the 25 largest and most liquid Chinese companies you can trade. China's stocks have taken a beating in 2011, the Shanghai Composite Index is down about 10% this year vs. a 1% decline for the S&P 500 (articles continues after chart).
Mastery is speculating that the worst may be over for Chinese securities thus the push for the FXI. You could also argue that we finally just bounced and now China could tank once again. That bearish view is supported by the latest manufacturing data coming from China, in short its not good. December was the first time in over 2 years that foreign investment fell. Even China is feeling the pain but this is going to jab the country to get their house in order with monetary and fiscal policies.
This is China we are talking about and they hate losing.
Which is why Mastery believes they will come back swinging and show the world they are the rightful No. 2 economic superpower and on their way to take the No. 1 spot from America.
When it comes to growth potential you can't bet against China. The growth coming from the East may be slowing down, but its growth none the less. China could help the world economy get back on its feet and that's likely to happen before the U.S. gets moving. Countless companies are still pouring money into China. Like Visa, for big corporations trying to survive, China its still everywhere you want to be.
If you think we are smoking crack you can bet against China (go short) by using the ProShares UltraShort FTSE/Xinhua China 25 (FXP). However Mastery likes the level of support the FXI has seen above $30 since November. The debate over where China is heading will never end, thus we conclude this argument with a clip from Enter the Dragon.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- Don't Overplay the Bounce | Financial Sense
- "Good-Enough" Jobs Data Sparks Stock Slump As September Rate Hike Odds Jump | ZeroHedge
- Potential Runners | iBankCoin.com
- No, China Is Not Crashing | Financial Sense
- Losing Faith? Traders Dump Japanese Stocks At Fastest Pace In History | ZeroHedge
- Martin Armstrong Warns: The #1 Terrorist Group Is You, Domestic Citizens | ZeroHedge
- Heresy! China Won't Stick To IMF, World Bank Lending "Religion" With AIIB | ZeroHedge
The most relevant financial news and articles from the Internets
- The perverse text messages that led to Jared Fogle's downfall | Business Insider
- Lost Australian sheep yields 30 sweaters worth of fleece | Business Insider
- These are the 7 emerging cartels Mexico just recognized | Business Insider
- Why Donald Trump would still be a billionaire even if he never worked a... | Business Insider
- Players hoping "Deflategate" can usher in change | Business Insider
- This 'Cat Street View' interactive map lets you see the world through a cat... | Business Insider
- Donald Trump is absolutely destroying his Republican rivals in almost every facet | Business Insider