ETF, FXI…A Nice Way To Play The China Rally

China’s equities and its currency have more room to rally in the near-term as multiple securities are about to be added to global indexes or to have their weighting increase, presumably leading to capital inflows that could deliver a boost to the local market, an Oxford Economics strategist said.

“Like with most global risk assets, the recent pace of gains was unlikely to be sustained and a pause was healthy,” but Saroliya said the momentary retreat is unlikely to derail what he perceives as a bullish, near -term momentum for China assets.


I talked about Smart Money’s migrant of capital into the Chinese markets a week ago,

MSCI Inc. (MSCI), a leading provider of indexes, portfolio analytics, and services for globalinvestors, announced this past Thursday that it will increase the weight of China A shares in the MSCI Indexes from 5% to 20% this year.

May experts around the world think the news is going to bring $50 to $80 billion into the Chinese markets as of result of the news. One way to play this move is to invest in the Xtrackers Harvest CSI 300 China A ETF (ASHR).  On Friday, the Smart Money bought over 15,000 July call options with a strike price of $31.51.


I talked about the Shanghai Exchange in particular two weeks ago and showed on the weekly chart that I thought prices were going higher.

Shanghai Exchange…Don’t Call It A Comeback

A way to play the Chinese rally is through the iShares China Large-Cap ETF, FXI .  The FXI seeks to track the investment results of the FTSE China 50 Index composed of large-capitalization Chinese equities that trade on the Hong Kong Stock Exchange.

Top Holdings include:


Price is in the middle of monthly zones.

Price is also in the middle of weekly zones.

However, the momentum is to the upside. The chart suggest to buy on the pull back at the daily demand with a target at $48.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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