This is an excerpt from Cabot China & Emerging Markets Report, which seeks to capitalize on the big boom in China and other emerging market countries. Editor Paul Goodwin, Cabot’s international investing guru, provides your passport to profits.
The remarkably energetic rally in the PowerShares Golden Dragon Halter USX China ETF (PGJ) that began on March 17 at 27.5, pushed it as high as 32.7 on April 10. The Golden Dragon has experienced similar gains a couple of times since the beginning of its range-bound streak in October 2013, but none quite as concentrated. PGJ has now put in five days trading between 32 and 32.5, which is a calm consolidation without any evidence of profit taking or remorse selling. This action keeps our buy signal in good shape.
Earnings season is kicking into high gear for U.S. companies, but emerging market stocks are generally several weeks (or more) behind their U.S. counterparts. Thus far, only three of our portfolio’s stocks have confirmed Q1 reporting dates.
It was a flat day for developed markets, as the major indexes tried to stage an afternoon rally, but weakened at the close to book fractional declines. The Dow Industrials finishing down 7 points (0.04%), the S&P 500 lost 2 points (0.08%) and the Nasdaq fell 3 points (0.06%). The PowerShares Golden Dragon Halter USX China ETF (PGJ) strengthened slightly, gaining 0.05 points to finish up 0.15% at 32.66.
A researcher and writer for over 30 years, Paul Goodwin has been a member of the Cabot investment team and chief analyst of Cabot China & Emerging Markets Report since 2005.