In the US, equities have staged a solid rally this month with most of the move occurring after the election. Elsewhere in the world, equities haven’t exactly shared in the gains. Chinese stocks, using the iShares MSCI China ETF () as a proxy, surged throughout September and into early October as stimulus measures were announced. After a massive 42.7% gain from the end of August through the closing high on October 7th, MCHI reversed lower and was down 14.5% by Election Day. Headed into the election, MCHI actually stabilized somewhat, but post election it has taken another leg lower as it is now down 9% since then and 22.2% since the October high. As shown below, the ETF is also now in no-man’s-land trading smack in the middle of its 200 and 50-DMAs with gaps to fill from the September post-stimulus run up.
Although MCHI is pulling back, it is at least still higher than it was prior to stimulus announcements back in September. The same cannot be said for some of the country’s most prominent stocks. As shown below, Baidu () and Alibaba () have now both round-tripped over the past couple of months. That also leaves them at interesting standpoints from a technical perspective. Starting with BIDU, the stock has been in a steady downtrend throughout the past year and this recent turn lower leaves it testing support at 52-week lows. For BABA, the long term trend is a bit more friendly with a series of higher lows throughout the year. However, BABA has also been on a ruthless stretch of declines including a daily loss in six of the last seven sessions. Whereas BIDU is testing support at 52-week lows, BABA is testing support at its 200-DMA.
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Chinese Stocks In Free Fall
