2 Emerging Markets ETFs Breaking Out on China Stimulus

Yesterday was a big day for China stocks and ETFs.

The PBOC cut its reserve requirement ratio to the lowest level in 4 years, as well as trimmed its main short-term interest rate.

The package included measures to lower overall mortgage costs and a de-stocking program that eased rules for second-home purchases.

It also gave a boost to commodities as China consumes a lot of them.

It also sent the lower while US equities were mainly green.

Yesterday’s action by China spurred reversals in some other country ETFs. 

We have 2 others to look at besides , the China ETF.

FXI chart is weekly. I did that for perspective after the huge rally.

The 200-week moving average in green shows resistance at 32.67 although the momentum right now is in favor of more upside.

January 2023 turned out a peak in FXI a bit higher at 33.38.

Nonetheless, we will hope for some consolidation after Yesterday.

Besides China, two other ETFs are looking to power high on the stimulus. Let’s take a look at each of them below.

1. Vietnam ETF

VanEck Vietnam ETF (NYSE:) as also declined this year.

However now, VNM has been consolidating between the 50- and 200-day moving averages. (Daily chart above).

Perhaps my favorite part of this chart is our Real Motion indicator showing a very substantial bullish divergence in momentum.

2. Mexico ETF

The daily chart of the iShares MSCI Mexico ETF (NYSE:) is another one that has our attention.

This daily chart shows the price action clearing the 50-DMA Yesterday.

Plus, EWW now outperforms the on the Leadership chart.

This could be an excellent time to look outside the US for investing.

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ETF Summary

(Pivotal means short-term bullish above that level and bearish below)

• S&P 500 (SPY) 565 pivotal support
• Russell 2000 (IWM) Range 215-225
• Dow (DIA) Not an island top but could still be a topping action
• Nasdaq (QQQ) 475 support 485 resistance
• Regional banks (KRE) 57 pivotal
• Semiconductors (SMH) 240 pivotal
• Transportation (IYT) 67.00 support 69 resistance
• Biotechnology (IBB) 145 support 150 resistance
• Retail (XRT) 73.50 support 77 resistance
• iShares iBoxx Hi Yd Cor Bond ETF (HYG) Still trading above the 200-WMA-healthy