By: DailyForex.com
FXI, iShares FTSE China 25 Index Fund, is an electronic-traded fund that tries to mirror the performance of the FTSE China 25 Index. The index represents the performance of the largest and most liquid companies in China’s equity market available to international investors. Fifty-six percent of the fund are companies in the financial service sector, the next highest being communication services. The larges company is China Mobile Ltd, followed by a majority of banks and energy companies.
FXI is currently trading between its 52-week range of 31.62 and 40.74, at 35.27. Total net assets are $4.7 Billion including a growth of 500 million since last month or 11.34%. The long-term trend is bearish, with a strong bearish momentum. The ETF has had lower than normal volatility. The short-term trend is somewhat bullish with a bearish momentum, as the 10 and 20-day simple moving averages are trending higher.
The ETF triple-topped at 35.50. My trade is to sell the 35-36 bear call spread for $0.50 credit.
Risk: $50 per one lot
Reward: $50 per one lot
Break even: $35.50
This market signal comes from Andrew Keene, a trader on the Chicago Board of Exchange for over 10 years and the founder of KeeneontheMarket.com, a live trading room that runs daily during the NY session and focuses on a range of tradable assets including Forex, ETFs and stocks.