Fairlead Strategies Idea Generator
iShares China Large-Cap ETF (FXI) & Updates (BTU, SWN)
To preserve unrealized gains, we are tightening our recommend stop-loss level for Peabody Energy (BTU) from $19.00 to $19.90 and for Southwestern Energy (SWN) from $5.46 to $6.40.
Chinese equities are reacting positively to oversold conditions, so today we are adding iShares China Large-Cap ETF (FXI) to our list of long ideas with a short-term time horizon:
FXI has a short-term oversold “buy” signal per the daily stochastics after holding cloud-based support, which keeps its counter-trend upmove intact. We expect a relief rally to retest resistance at the 200-day moving average as Chinese stocks temporarily outperform U.S. stocks.
FXI’s recovery off the March low came after it held support at the bottom boundary of a multi-year trading range. The recovery generated a long-term oversold upturn in the monthly stochastics, suggesting the move off the low is the start of a basing phase.
The 200-day moving average, currently near $35.10, can be used as a targeted resistance level. It has proved a hurdle for some high-profile constituents of FXI (e.g., Meituan, Alibaba). Two consecutive daily closes below the daily cloud (~$31.10) can be used as criteria for a stop-loss.
iShares China Large-Cap ETF (FXI, $31.75):
Target: $35.10
Stop-Loss: $31.10
Do you give out your settings for Stochastics and MACD?
In regards to FXI, on the daily timeframe, in my Tradingview chart, FXI MACD is pointing lower, Stochastics is pointing higher tho.
Thank you.
Yup, you called it. BTU came down to 19.90 or so and recovered! Kudos