Tuesday, August 11, 2009

FXI Long Puts

Chinese etf (FXI) is looking to breakdown from a head and shoulders on the 60min chart and I think this is a good play on the downside as the commodities are selling off and dollar is rallying. Target on this trade will be 39.50 as that is roughly a measured move from neckline of H&S pattern.

I like the Sept 43 puts as a nice in the money play at 3.25. Alternatively for a more aggressive trade you can buy the Sept 41s around 2.10. Either way I think the next few days to a week can see selling pressure on FXI. Cut losses if FXI trades above 42.50.


GS751 said...

Funny how you post that... A trade I have on right now is long a bunch of the Nov 39's @ 2.75. The chinese and their ponzi Scheme economy. FXI is one market that is trading WAYYY above where it should be fundamentally.

Jason said...

Ha yeah who knows but at least a correction is due. Especially with the commodities pulling back.