The Shanghai Composite rallied 5.7% in Monday’s trading session as China’s state-run Securities Journal noted the importance of a healthy bull market to the Chinese economy. This news sent both the iShares China Large Cap ETF (FXI) and Baidu (BIDU) soaring in the U.S. session. As of 1:30 PM ET, FXI is up 8.7% and BIDU is up 6.9%. In this blog post, we will review our weekly cycle analysis for both FXI and BIDU.
iShares China Large Cap ETF (FXI) Weekly Chart – annotations by askSlim.com
askSlim.com Technical Briefing: The weekly analysis suggests that FXI is in a positively configured cycle. The next projected low is due in the middle-to-end of August. Weekly momentum is firmly positive.
On the upside, there are prior cycle high resistances from 45.29 – 45.96. On the downside, there is a rising intermediate-term support at 42.27 followed by another zone of support from 40.52 – 39.10. For the bears to regain control of the intermediate-term, we would need to see a weekly close back below 37.69.
askSlim.com Sum of the Evidence: FXI has a bullish weekly cycle pattern with positive momentum. Given these conditions, we would expect downside to be limited to the rising intermediate-term supports beginning at 42.
Baidu (BIDU) Weekly Chart – annotations by askSlim.com
askSlim.com Technical Briefing: The weekly cycle analysis suggests that BIDU is forming an important base. The next projected intermediate-term low is due in early-to-mid August. Weekly momentum is positive.
On the upside, there is an intermediate-term Fibonacci resistance at 133.39. On the downside, there is a rising intermediate-term support at 120.35 followed by another zone of support from 113.02 – 107.10. For the bears to regain control of the intermediate-term, we would need to see a weekly close back below 101.17.
askSlim.com Sum of the Evidence: BIDU has a bullish weekly cycle pattern with positive momentum. Given these conditions, we would expect any downside to be limited to the rising intermediate-term supports beginning at 120.
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