February 11, 2010:  The strong run of China seems to be over with charts turning bearish and a lot of bull defense lines broken. The Xinhua China 25 index may rally briefly, but the downtrend seems to have gained strength.

•  On the weekly chart the 30-week moving average has been penetrated. Several long term investors that use the four-stages of the market to enter and exit positions closely follow the 30-week moving average. Price closing below the average with the average turning flat and not pointing upwards is a bearish sign.
• Also on the weekly chart notice that prices have made lower highs and lower lows, which is again bearish. The lower highs and lower lows are shown by the pink arrows.
• Finally, look at volume on the weekly chart. It's rising as prices fall.
• On the daily chart prices have fallen below the 50 and the 200 day moving average--another bearish sign. Also the 50 appears poised to cross below the 200, which is a signal several institutions use to identify a bearish trend
• The ADX which shows the strength of a trend is rising as the market falls, indicating that the downtrend is strong
• Finally, the commodity channel index is coming back into the overbought territory. An overbought CCI in a downtrend is used by traders to short the instrument

Chart Analysis

FXI weekly and daily charts 

Support and resistance report

China's support and resistance report