China May Be A Long Term Buy With FXI

I have been keeping a close eye on FXI which is the Exchange Traded Fund (ETF) that tracks the Ftse/Xinhua China 25 Index, and it is nearing its next major buy point for long term bulls.

FXI first came under big notice when on 4/23/08 it gapped on heavy volume to close above key resistance. Since then the ETF has formed a very nice short term base and looks poised to start moving up again.

For those who have not seen FXI before, the index tracks 25 of the largest Chinese stocks and is a arguably a great play on the overall Chinese market.

fxi-050108.png

As seen in the chart the next major buy point for FXI is going to be at $162.90. Make sure to add FXI to your watch lists and time will tell how this trend unfolds.

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Comments

  1. says

    That would be a good place ya, the rough part is that it would be a 7% stop. Typically I like to stick with 3 – 5%. So I would imagine I would be into the break with a tight stop at first sat 2 or 3% and if I got knocked out I would try and rebuy closer towards the gap.

    What do you think?

  2. Rick says

    I meant the low of the high volume day, around $154 which is a 5% stop from todays close. If it breaks there, a lot of people will want to get out. Is that where you were talking about or were you thinking I meant lower around 147/148?

  3. says

    Hey Rick,

    Yes that would be it. Recently I have just gotten burned with these stops so to be honest your bet is just as good as mine. You could go $153.90 and have pretty good odds.

    Yesterday I grabbed DRYS on the breakout which you probably saw on the blog. I like that play over FXI (which I have yet to buy).

    Have a great weekend Rick, good luck out there!

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