China ETF (MCHI) Trending Lower Within Descending Channel
Chinese stocks have struggled throughout 2018. China’s economic growth rate has slowed, and the United States and China have been locked in a trade war. The trade dispute rhetoric really started at the end of January and since that time the Shanghai Composite Index has lost over -24%.
Well-known names like Weibo and JD.com have dropped over 50% since January 26. This is the date when President Trump escalated his trade talks.
One China ETF that has been caught in the downward trend is the iShares MSCI China ETF (Nasdaq: MCHI). The daily chart shows how the ETF has cycled lower over the last five months with a clear upper rail and lower rail forming a channel.
The formation of the upper rail coincides with the overbought readings from the stochastic readings and the bearish crossover in the readings. It is also worth noting that the upper rail is in close proximity to the 50-day moving average which could act as two layers of resistance for the fund.
The MCHI just hit the upper rail of the channel on Friday and then turned lower on Monday, which suggests we could be looking at the next cycle lower over the coming days.
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MCHI sees MACD Histogram crosses below signal line
MCHI saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on August 13, 2026. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 50 instances where the indicator turned negative. In 45 of the 50 cases the stock moved lower in the days that followed. This puts the odds of a downward move at 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on August 31, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on MCHI as a result. In 78 of 88 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 89%.
MCHI moved below its 50-day moving average on September 08, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for MCHI crossed bearishly below the 50-day moving average on September 10, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 12 of 13 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 90%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MCHI declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 85%.
The Aroon Indicator for MCHI entered a downward trend on September 11, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where MCHI's RSI Oscillator exited the oversold zone, 32 of 32 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 90%.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +0.49% 3-day Advance, the price is estimated to grow further. Considering data from situations where MCHI advanced for three days, in 210 of 256 cases, the price rose further within the following month. The odds of a continued upward trend are 82%.
MCHI may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
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