The iShares FTSE/Xinhua China 25 Index (FXI), after the pullback from yesterday's high at 41.08 into this morning's low at 40.68, appears ripe for upside acceleration. It appears to be consolidating between 41.00 and 40.70, and the price action has the right look of a bull flag continuation pattern prior to a thrust to the upside into my next optimal target zone at 41.50/80.

Only a break of today's low at 40.68 will compromise the bullish near-term pattern, which will give me reason to bail out of the long side of the FXI.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.