The Triple X China Strategy

Decoding the Dragon: Navigating China’s stock market like a pro…

Investing in the Chinese stock market offers a unique opportunity due to its diverse industries, including technology, consumer goods, and green energy, reflecting China's rapid economic expansion and global influence. Investors can gain from China's growing economy, benefiting from stated government reforms that enhance market transparency and accessibility.

Investing in the Chinese stock market can help diversify your portfolio by exposing you to unique market trends not seen in Western economies. This may lower overall risk. China's government projects, like the Belt and Road Initiative, aim to boost trade and could benefit companies in the Chinese market. Despite regulatory and market risks, the potential for long-term growth and involvement in China's global economic rise makes it an appealing investment choice.

To navigate the China stock market volatility, the Triple X China Strategy utilizes the following technical indicators as applied to the Direxion Daily FTSE China Bull 3X Shares.

  • Trading Volume (42-day low)

  • Five day Price Momentum

A strategy that buys when trading volume hits a 42-day low and sells after making a 10% or more gain within five days works because it takes advantage of market patterns and behavior. Low trading volume often means the stock isn’t being heavily sold, which could signal a good time to buy before prices go up. Selling quickly after a 10% gain locks in profits before the stock can reverse or lose momentum. This strategy focuses on buying during calm, quiet periods and selling during sudden, fast price increases, helping to reduce risks while capturing short-term gains. It relies on discipline and works best in active, momentum-driven markets.

The strategy works on a weekly schedule, with signals based on the previous week's closing price and trades made the following Monday.

A Word About the Direxion Daily FTSE China Bull 3X Shares (symbol YINN)

The Direxion Daily FTSE China Bull Shares seek daily investment results, before fees and expenses, of 300% the performance of the FTSE China 50 Index. There is no guarantee the funds will achieve their stated investment objectives. This leveraged ETFs seeks a return that is 300% of the return of their benchmark index for a single day. The funds should not be expected to provide three times or negative three times the return of the benchmark’s cumulative return for periods greater than a day.

Index Information

The FTSE China 50 Index (TXIN0UNU) consists of the 50 largest and most liquid public Chinese companies currently trading on the Hong Kong Stock Exchange as determined by FTSE/Russell. Constituents in the Index are weighted based on total market value, so that companies with larger total market values will generally have a greater weight in the Index. Index constituents are screened for liquidity and weightings and are capped to limit the concentration of any one stock in the Index. One cannot invest directly in an index.