Using charts for foreign markets is one of the most reliable ways to analyze markets that have a lot of factors that affect the stock prices. China-based stocks are influenced by current currency rates, import and export prices and politial presence. With the use of charts, you can single out those influencing factors to determine how it affects the market in its entirety.
You can make a gain on China-based stocks just based on currency, even the stocks do not perform well in their home market. within their country. China has very cheap currency currently. China fixes the value of the yuan against the dollar at the moment, which is source of contention between the US and China. It is believed that China reigns in the value of its currency to make its exports cheaper. It is inevitable that China’s currency will appreciate over time at an estimated rate of 3-5% per year. Some experts believe that China’s currency is undervalued by as much as 50% currently, which means there is still a bull market to come.
Time and Trend
In the United States, some of the largest companies are listed on indices like the Dow Jones Industrial Average and the S&P 500. The EAFE (European, Australian, Far East) index can be compared to a global version of the S&P 500. It is highly unusual that there are no China-based stocks listed on the EAFE, since China has the second largest economy in the world. In comparison to the size of China’s economy, the amount of securities available for trade in China’s market is relatively small. The China market will grow over time with more securities coming into play, which should increase China’s market share to a more appropriate size of approximately 18% of the indices. Watching the growth trends for China-based stocks using charts should give you a reliable entry point into the market as China becomes more prevalent in the stock market.
If you’re thinking about adding China-based stocks to your portfolio, it’s a good idea to use charts for analyze the stocks. You get a lot of reliable information and insight into the stocks historical trends and currency that are not easily found elsewhere. Think of charts as a tool to provide you with the most current information available on this volatile, but interesting stock market.