Courtesy of Doug Short.
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Many major stock indexes in the United States and Europe are either at all-time highs or near them. One sixth of the world’s population can’t make the same statement.
The chart below illustrates that the Shanghai Index and the popular China ETF (FXI) have both greatly underperformed the S&P 500 over the past five years … by more than 100%!
The next chart highlights that the Shanghai Index and FXI are both making another attempt to break from multi-year falling resistance lines at (1). At the same time the Shanghai index is setting on a support line that dates back almost 20 years, creating a multi-year pennant pattern that will come to an end pretty soon.
Should the Shanghai index & FXI break resistance, buyers could well start purchasing these underperformers and push them a good deal higher. Could a breakout in China help push Europe and the States stock index’s even higher?
Stay tuned! This is a very interesting resistance point for investments that represent one sixth of the world’s population! Is a multi-year bullish breakout about to take place? This is an interesting price point for a major region of the world.
Kimble Charting Solutions
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