Is Your Portfolio Compatible with the Year of the Goat?

• Posted by Greg Harmon
• on February 27th, 2015

2015 is the year of the Goat in the Chinese calendar. The luckiest things for goats are the numbers 2 and 7 or any number containing them and the direction North. Goats are most compatible in love with rabbits, pigs and horses. this might explain why a combination of a goat and horse, or a llama blew up the internet yesterday.

In financial circles the year of the Goat has a tough act to follow from the year of the Horse. The Shanghai Composite rose over 70% in the year of the Horse. Can it move higher still? The chart below shows the consolidation around the 3200 level in the Shanghai Composite.

But it also shows the peaks from 2009 and 2010 in this are of current consolidation. There is not a lot of prior price history above these levels. The concern a couple of months ago was that it had run up too far too fast. But the momentum indicators have worked off some of that steam. The RSI is no longer overbought while the MACD has pulled back. Incidentally though both are starting to turn back higher. Is the Goat about to run up the mountain?

A break of the 3400 level would be a first clue. Followed by a move over the 2009 high at 3478. If the Composite clears though levels there is nothing but the thin rocky ledges of that steep drop from 2008 for the Goat left to climb. But Goats are great climbers. Look for 3750 or 4250 as the next areas of prior activity to be possible resistance and perhaps the round number at 4000 in between.

If you want to participate in this move up take a look at two ETF’s that follow the index closely. The first and most liquid is a DB X-Trackers fund, $ASHR, and the second is the China ETF Market Vectors, $PEK.

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