The Indian market looks attractive right now. Earlier this year, the INP MSCI India index ETF broke out from a base that had been in place since 2012. The index ETF, which currently sits around $73 USD, looks to target $80-$84 at this time. If that target is cracked, the old highs of $100+ (not seen on this chart) could be tested. Cumulative money flow has been bullish since late 2013 (bottom pane, circled), and the comparative strength to the S&P500 has been positive for most of this year (middle pane, circled). Buyers are gaining control in this market.
China has emerged from a multi-year downtrend recently. I blogged on China in July (https://www.valuetrend.ca/?p=3131), suggesting that if the Shanghai broke 2300, the downtrend that has been in place since 2009 would be broken. After cracking a descending triangle this year, the Shanghai carried forth to break the larger downtrend. I mentioned on BNN last week that the Chinese government is becoming accommodative to business growth and towards monetary policy. Here is the Top Picks writeup and video featuring my play on the BMO China ETF, and 2 other stocks:
http://www.theglobeandmail.com/globe-investor/funds-and-etfs/etfs/three-top-picks-from-valuetrends-keith-richards/article21512076/
I’m targeting 3000 for the Shanghai index. The Shanghai is just starting to show outperformance vs. the S&P 500 (circled, middle pane).
Free Technical Analysis Seminar in Markham with Keith Richards
Markham Village Library: 6031 Hwy. 7 East, Markham, Ontario, L3P 3A7 – Wednesday, November 26, 2014, 7:00 PM
2 Comments
Hi Keith. Thanks for all of your help over the years. Here is my question? What kind of Volume do you think a stock or ETF should have when buying in? I have recently been playing the price up game with ZCH which is relatively illiquid with a volume of 1000 or less through the day. I wonder what happens on the way out of this ETF in a sell off. I know Don Violoux recommends nothing less that 40,000 per day. What do you think?
ETF’s have market makers that manufacture the product to meet demand, and buy it on the market to meet demand. So its different than a stock. They are manufactured by the market maker by buying the underlying stocks (in this case, ADR’s) in proportion to the index to meet “buy” demand, and are bought by the market maker to meet selling demand and either resold as ETF’s from an inventory, or immediately deconstructed. The bid vs. the ask shown is often the market makers his/her spread. So I don’t worry about volume as much as with a thinly traded stock. So long as the underlying positions (Chines ADR’s) are liquid, you can sell. I hold this ETF as you may know, and I am not worried about selling when the time comes.