At the Wealth365 Summit, I mentioned my top picks for stocks for 2019 were from the Chinese markets as they were getting set up to run.
Since then, the broader markets have been on a run as well as the growth stocks within China. This week has seen a 200 point range from last Friday’s close which would be similar to the S&P 500 moving 200 points a week. As the $SPX (S&P 500) has been down 8 this week, the Shanghai index is quickly starting to outperform the US market.
The top performing ETF’s over the last month have been from China. As this outperformance starts to kick in, it can be valuable to try and ride the early trend development. This outperformance is shown on the purple area chart above. Looking at the price panel, the market is now 11% above the 10-week moving average which is considerable. While technicians don’t recommend entering after a parabolic spike has started, this market is worth watching for a pullback and a nice entry. If the Shanghai market is going to start outperforming (called ‘relative strength’ where one chart is moving up faster than another chart), this break of the down trend on the purple chart is significant as a clue.
On the table below, ETF’s are ranked from the best performing over the last month at the top. There are a wide variety of Chinese ETF’s on the list.
While China is not the only good grouping on the list, it is clearly doing very well. Whether investors choose the CNXT or the KWEB ETF a little farther down the list, there are some exceptional returns being generated.
By using relative strength and simple ‘best performing ETF’ tables over a one-month or three-month time frame, investors can find areas of the market to be invested in. You can also investigate the contents of those ETF’s to find individual stock names that are propelling those gains.