Believe It: A Breakout is Possible for Chinese Stocks

Chinese stocks and the exchange traded funds that hold those shares have been disappointments this year.

Despite ongoing calls that Chinese stocks are inexpensive, the iShares China Large-Cap ETF (NYSEArca: FXI) has performed slightly worse than the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) since the start of the year.

A look at a long-term chart of the Shanghai Composite, provided below courtesy of Chart of the Day, indicates the mainland benchmark index is once again bumping up against critical resistance.

Chart Courtesy: Chart of the Day

The Shanghai Composite is up almost 1.6% this year, but if it can break the aforementioned technical resistance, that should light a fire under the db X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR) and the Market Vectors China ETF (NYSEArca: PEK). The reason: Stocks traded in Shanghai are classified as A-shares and ASHR and PEK are the only U.S.-listed ETFs to offer investors direct access to A-shares equities. [A-Shares ETFs Increase EM Access]