As investors deal with a vacillating market, predicting the top and bottom would be very lucrative, especially in China’s exchange traded fund (ETF).

Last week’s low for the IShares FTSE/Xinhua China 25 Index (FXI) was about 5% higher than October’s low with record volumes traded in Friday’s rebound, writes VIX and More.

Signs of bottoming out look promising in the FXI compared to many others in U.S. equity markets. FXI is currently down 51.5% year-to-date.

There is debate regarding the allocations of the $586 billion Chinese stimulus package for new spending and how much projects have already been committed but shuffled under the stimulus plan.

Current estimates of growth puts China at 7% with the possibility that the economy may shrink further.

In accordance to our strategy, FXI and other China-focused ETFs are still far off both the 50- and 200-day moving averages. FXI may be really beat up, so it could gain nicely in a recovery, but wait for the trend first. Right now, it doesn’t seem to be there yet.

Tags: Asia, China, Emerging Markets, FXI