GET DAILY SIGNALSChina 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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Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.
MCHI in downward trend: price expected to drop as it breaks its higher Bollinger Band on November 05, 2026
MCHI broke above its upper Bollinger Band on November 05, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options. The A.I.dvisor looked at 43 similar instances where the stock broke above the upper band. In 40 of the 43 cases the stock fell afterwards. This puts the odds of success at 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 59 of 66 cases where MCHI's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 89%.
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 November 02, 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 Indicator exited the oversold zone, 29 of 31 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 90%.
The Momentum Indicator moved above the 0 level on November 04, 2026. You may want to consider a long position or call options on MCHI as a result. In 71 of 88 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 81%.
The Moving Average Convergence Divergence (MACD) for MCHI just turned positive on November 03, 2026. Looking at past instances where MCHI's MACD turned positive, the stock continued to rise in 38 of 48 cases over the following month. The odds of a continued upward trend are 79%.
Following a +5.34% 3-day Advance, the price is estimated to grow further. Considering data from situations where MCHI advanced for three days, in 212 of 261 cases, the price rose further within the following month. The odds of a continued upward trend are 81%.
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