By J.C. Parets & All Star Charts
Tuesday, 20th June, 2023
1/ Chinese Equities Roll With the Punches
2/ IPO Emerges Higher
3/ Crypto Stocks Strike Back
4/ Commodity Currencies Confirm
Investopedia is partnering with All Star Charts on this newsletter, which both sells its research to investors, and may trade or hold positions in securities mentioned herein. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice.
1/ Chinese Equities Roll With the Punches
Technology, consumer discretionary, and other risk-on growth stocks have been ripping higher in recent weeks. But one market area the often enjoys a bid alongside these names has been left out of the loop: China.
Check out the China ETF (GXC) posting its largest one-day downside rate of change since last October:
The bulls have stepped aside as price undercuts a key shelf of former lows. And considering that GXC is turning away from a downward sloping 200-day moving average, this represents a bearish signal for Chinese equities.
There’s plenty of strength to be found overseas right now, just not in China.
2/ IPO Emerges Higher
With technology and growth areas leading this year, it was time for the laggards to wake up and catch higher.
The Renaissance IPO ETF (IPO) is finally piercing to the upside through its early-year highs of around $31 as buyers take control.
A lack of an oversold reading on the 14-period relative strength index (RSI) and a flat-to-upward-sloping 200-day moving average are present on the chart, which means that a transition from bearish to bullish could be underway.
If this breakout above $31 sticks, IPO could complete this base and kick off a new leg to the upside.
3/ Crypto Stocks Strike Back
Although Bitcoin (BTC/USD) and friends were lagging for a couple of weeks, crypto stocks look ready to wake up from their nap.
We’ve created an equal-weighted crypto miners index that includes Marathon Digital Holdings (MARA), Riot Platforms (RIOT), and Hut 8 Mining Corp (HUT).
These stocks found their floor after a nasty drawdown last year and have been carving out a rounding bottom formation since.
The index is pressing against the upper bounds of the range and threatens to break out.
If and when it does, these stocks will likely be an excellent vehicle to express a bullish thesis in cryptocurrencies.
4/ Commodity Currencies Confirm
Besides the U.S. Dollar Index (DXY) trading below 101, we have monitored two key data points for confirmation of continued dollar weakness.
The euro trading above 1.08 is the first and foremost, as it constitutes over 57% of DXY. (Today, it’s challenging a 1.10 handle.)
The second piece of confirming information involves commodity currencies. The Canadian dollar, New Zealand dollar, and Australian dollar needed to reclaim their July pivot lows.
They did just that last week:
The Canadian dollar completed a multi-month basing formation, joining the aussie and kiwi above its respective summer 2022 pivot lows.
If these commodity currencies continue to trend higher, dollar weakness could broaden as the index trends below that crucial 101 level.
—
Originally posted 20th June 2023
Disclosure: Investopedia
Investopedia.com: The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy. This information is intended for US residents only.
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Investopedia and is being posted with its permission. The views expressed in this material are solely those of the author and/or Investopedia and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Disclosure: ETFs
Any discussion or mention of an ETF is not to be construed as recommendation, promotion or solicitation. All investors should review and consider associated investment risks, charges and expenses of the investment company or fund prior to investing. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Disclosure: Forex
There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.
Disclosure: Bitcoin Futures
TRADING IN BITCOIN FUTURES IS ESPECIALLY RISKY AND IS ONLY FOR CLIENTS WITH A HIGH RISK TOLERANCE AND THE FINANCIAL ABILITY TO SUSTAIN LOSSES. More information about the risk of trading Bitcoin products can be found on the IBKR website. If you're new to bitcoin, or futures in general, see Introduction to Bitcoin Futures.
Join The Conversation
If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.