Chinese equities are surging like never before in history.
The iShares China Large-Cap ETF $FXI rallied over 18%, marking its best week ever.
We call this a "momentum thrust". Such extreme readings often precede rallies and tend to occur at the beginning of new bull cycles.
Here's the FXI chart with the 1-week rate of change in the lower pane:
As you can see, this is happening after a test of a critical support level, right at a shelf of former lows.
In addition, price is reclaiming the VWAP from the 2021 highs, which means bulls are back in control for the first time since then.
One thing we know for sure is that seeing the most beaten-down areas of the market spring back to life with such vigor is not a bearish development.
In fact, I think it’s time to embrace these high beta stocks.
They are on the rise.
And as technicians, we want to take advantage of these new uptrends.
Just look at what Sean McLaughlin, Chief Options Strategist at All Star Charts, did this week. He bought Tencent Music Entertainment Group $TME calls. I love that trade. Check it out here.
