Chart 1: Chinese H Shares are attempting to break out on the upside…
In a recent article titled “China Is Outperforming“, I discussed how despite the fact GEM stocks were under pressure, Chinese shares held up extremely well. I wrote:
…one of the most interesting developments during the current sell off was the fact that China didn’t go down as much as other emerging markets. As a matter of fact, China outperformed just about every EM index on relative basis and currently sits very close to its 52 week highs. Compare this to the likes of Brazil, Russia, Mexico and a couple of other EM countries, all of which are at or near their 52 week lows.
Well, today’s chart of the day focuses on the China H-Shares Index, which is now attempting to break out of its extremely long basing pattern. As a disclosure, regular readers should know that I have been heavily long this index for several weeks already.
Currently, the price is close to making a 3 year high. A proper breakout could signal start of a new bull market after such a prolonged period of stagnation and disappointment.