Timing's Right for Five Country-Based ETFs

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iShares FTSE/Xinhua China 25 Index (FXI)

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Source: eSignal

The iShares FTSE/Xinhua China 25 Index (FXI Quote) ETF rallied to an all-time high in October, in the latest leg of a powerful rally that began in 2005. The stock then entered a deep correction that almost cut the shares in half by the March low. It bounced strongly at that level and stalled at 200-day moving average resistance in early April.

Note how price action between January and April carved out a well-organized basing pattern that converged with the 200-day moving average. The fund gapped above that level last week after Chinese officials lowered the stamp tax for equity transactions. This breakout sets up a major recovery that could eventually lift price back over $200.

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BLDRs Emerging Markets 50 ADR Index (ADRE)

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Source: eSignal

The BLDRs Emerging Markets 50 ADR Index (ADRE Quote) ETF is a unique instrument comprised of blue-chip stocks from all over the world. It currently features a heavy weighting in China and Brazil. The fund hit an all-time high at $60.31 in late October, pulled back, and bottomed out with other world markets in January.

Price action shows uneven progress since the first-quarter low, with a deep March pullback that found buyers in the mid-$40s. Momentum has perked up since then, lifting price over 200-day moving average resistance. The recent breakout above the six-month trend line was a notable achievement that sets the stage for a continued recovery.