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The action in the ProShares FTSE/Xinhua China 25 Stock Index ETF (NYSE: FXP) since mid-June exhibits a series of lower-lows in price, higher-lows in momentum (RSI), and declining volume into weakness, all of which are warning signals that the current downtrend in the FXP is extremely stressed – and ripe – for a period of countertrend movement. Based on the current technical set-up, the FXP is heading for a confrontation with the Jun-Sep resistance line, now at 10.35, which should be hurdled on the way to a test of much, more important resistance at 11.44. If that level is hurdled and sustained, the upside projection points to 13.00/30.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
