The Rotation Powering China

If you’ve been following me for a while, you know I’ve been long China.

This is a bet against the crowd. Nobody trusts these companies or their numbers—honestly, I don’t either. But I don’t have to. 

I trust price.

And for months now, these stocks have been catching a relentless bid. That kind of price action tells me everything I need to know.

Investors are willing to take the risk, and as long as price keeps confirming it, I am too.

One big reason China is working—something no one’s really talking about—is the quiet rotation happening across emerging markets.

The Large-Cap China ETF $FXI recently scooped higher above a key support level relative to the Emerging Markets ETF $EEM.

As long as we’re above that shelf of former lows, Chinese equities are likely to assume a long-term leadership role.

This morning, three Chinese options positions doubled in the Breakout Multiplier strategy.

One of them was EHang Holdings $EH, a $1.1B company specializing in autonomous aerial vehicles for passenger transport, logistics, and smart city applications.

Here’s the chart:

The stock popped 12% today as it sets up for a textbook bearish-to-bullish reversal. 

The upside potential is huge, and risk is clearly defined at 23.

We sold a quick double and now we have a free ride on a stock that literally hasn’t even broken out yet. We think it’s about to. 

If you want these trade details, sign up here and join Breakout Multiplier risk-free.

Have a great weekend!

Alfonso