I’ve been positioning myself for the next leg higher in China for a while now.
Markets have been telling us something big is brewing in these stocks.
That why, earlier this year, I broke down three key reasons to be bullish — and those reasons still hold strong today.
But this time around, I’d add one more, extra-important reason: China is breaking out.
It’s not just the largest Chinese stocks performing well — now even the most risk-on groups are on the move.
That’s exactly the type of confirmation I want to see when a rounding bottoming formation is resolving higher.
You can see it in the Chinese Technology ETF $CQQQ, which is completing a major multi-year base.
After multiple failed attempts, price is finally piercing through the upper bound of this range, reaching its highest level in over three years.
What makes this different is that it’s the first time since February 2021 that price has closed the week above the VWAP anchored to the all-time highs.
This means the average investor since that peak is now in the green, and that buyers are back in control of the primary trend.
Steve went even deeper and created an Ark of China Index, an equal-weighted basket of the most speculative stocks.
And let me tell you something — it looks fantastic.
That’s further evidence that participation is broadening out, and the strongest hands are showing up.
This is a market you don’t want to ignore. The bottoming process has played out, buyers are taking control, and the breakout is underway.
I’m long Chinese equities. I have exposure to them.
I’m long $BABA, $BIDU, $TIGR, among others. And on Friday we put a new trade on $KC for Breakout Multiplier members.
