Nov. 16, 2009 (Chinavestor) Shares of Chinese companies continued to rally on Monday. The Hang Seng Index advanced +390.35 points or +1.73% to a new 52 week high of 22,943.98. Stocks in Shanghai rose even more following optimism that the world third largest economy is on track to surpass 8% GDP growth for the year.
Index futures point to a higher open, setting a strong market day for China ADRs. The strength of the Hang Seng index is a strong catalyst for the Chinese ADR universe. As the following technical summary on the bottom of the chart testifies, Chinese stocks are not overbought yet, giving more room for upside. Sinovac (AMEX:SVA), Sina Corp. (NASDAQ:SINA) and WuXi Pharma (NYSE:WX) are on the earnings menu for today.
As the overbought/oversold indicator suggests, strong market day in Hong Kong and Shanghai makes a case for the iShares Xinhua 25 Index (NYSE:FXI) and the Morgan Stanley China (NYSE:CAF). The China real estate EFT has ground to make up, expect it to have a strong showing on Monday. But as the chart testifies, the DJIA is getting overbought, suggesting that Monday can be an excellent day for profit taking!
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