With The US Market in the Dumps Turn To China (Part III)

Earlier this week in Part I I looked at the set up in Baidu, $BIDU, and then more broadly in Part II the Shanghai Composite, using the closest US ETF proxy $FXI. That should be enough to look at in China, right? But wait, there is more! A look at the currency, via the WisdomTree Chinese Yuan Fund, $CYB, shows another breakout setting up.

cyb

The chart above shows a rising trend line support since September 2012 (purple line) has been tracking the rising 100 day Simple Moving Average (SMA) and an acceleration since July this year (red line). Now it is bumping against resistance at 26.50, where it has been consolidating since mid October. With the RSI turning higher it only needs the MACD to join it for support for a breakout higher and a target of 27 on a Measured Move. So there you have it, Baidu stock, the Shanghai Composite or The Yuan. Follow one or follow them all.

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