The rebound in the Chinese stock market could be coming to an end. As you can see on the following charts, the iShares China Large-Cap ETF FXI is close to a possible resistance level.
This could put a top on the price.
In December and November, there was support for FXI around the $35.20 level. This means there was a large number of buyers willing to pay that price for new shares. And each time FXI fell to it, it reversed and rallied.
But now FXI is trading at a lower price.
Many of the investors who paid $35.20 now regret their decision to buy. Some will decide to sell, but they don’t want to take a loss. As a result, they place their sell orders at their buying price.
If there are enough of these sell orders, it will create a resistance level. This could keep the shares from moving higher.
(Click on image to enlarge)
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