Again with many calls coming in from subscribers asking about the international markets, specifically the emerging markets, for this weeks edition of the SIA Equity Leaders Weekly, we are going to look back at two countries which dominate so many of the ETFs within the SIA International Equity Emerging Markets report: China and India. Looking at both of these huge economies it might be surprising to see such a disconnect as far as their trends for these two 'super' emerging market powers.
iShares China Large-Cap ETF (FXI)
If looking for exposure to large companies in China, iShares China Large-Cap ETF (FXI) offers access to 50 of the largest Chinese stocks in a single fund. The 50 companies contained in this ETF trade on the Hong Kong Stock Exchange, and the ETF itself sees tremendous daily volume, averaging over $500,000,000 per day.
As can be seen from the chart, FXI has continued to new all-time highs through strong resistance at $47, and then above $50. Further resistance is now seen at $55 and then $60. With an SMAX of 9 out of 10, this China ETF is continuing to show near-term strength against all asset classes.
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WisdomTree India Earnings Fund (EPI)
Since last looking at the SIA International Equity Emerging Market Report less than 2 months ago when 30% of the Favored zone referenced exposure to India, things have changed very dramatically. A single small-cap name is all that remains within the Favored zone as most have slid recently into the Neutral area.
From the chart of EPI you can see that after early March gains to resistance at $24.77, the shares have slowly moved towards support around the $21 level. Unless it breaks through this level, we can possibly see the India ETF consolidate between the noted support and resistance levels.
The interesting thing to note here is that not all Emerging Markets move together. While China is grabbing all the attention lately, some other emerging plays are showing life such as Taiwan, Philippines, and Russia.
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