Chart of the day

Where do we stand fundamentally?

The iShares MSCI China ETF (MCHI) provides exposure to large and mid-sized Chinese companies, offering international investors a targeted view of the Chinese stock market. Recently, the fund has seen a positive rise due to a stimulus package in China aimed at boosting economic growth. Year-to-date (YTD) performance as of the end of September 2024 shows a return of over 25%, indicating a strong rebound from previous years where performance was more volatile, especially during the pandemic years.

In terms of holdings, MCHI is concentrated in top Chinese companies, with a significant portion of assets in the financial and technology sectors. Its top 10 holdings account for nearly 48% of the fund's total assets. The ETF has a relatively low price-to-earnings ratio of 10.89, which is slightly above its category peers.

MCHI is testing the support marked by 61.8% retracement of the previous move higher 50 level. We need a bounce from here for an extension higher in the third uptrend Elliott Wave higher to 95. Invalidation of this immediate upside extension could come upon a break below 47.

An invalidation level of a third-wave long-term extension higher and a bullish cycle continuation is 42. As said the bounce could lead to a 95 target in the medium-term to long-term if the MCHI break and sustains a break above 57.

_{Try a long trade entry with a stop loss below 47 to target 65 and higher.}