The market action for BRIC (Brazil, Russia, India, China) countries has been pretty good lately. Below we take a look at long-term trading range charts for each of them going back to the start of 2013.
China’s Shanghai Composite experienced a legit crash in the second half of 2015 after an epic run higher from mid-2014 through mid-2015. Since markets bottomed globally back in February, the Shanghai Composite has formed a new short-term uptrend channel, but volatility has declined dramatically, giving investors plenty of time to catch their breaths after an epic boom and bust market cycle. Generally speaking, the action for Chinese stocks has been positive over the last six months.
lndia’s Sensex traded in a downtrend for pretty much all of 2015, but since bottoming earlier this year, the action has been very bullish. In the chart below, you can see a defined uptrend off the lows with a series of higher highs and higher lows. The 50-day moving average (white line) has acted as support multiple times during this run-up. Bulls are still looking for a re-test of prior highs, though.
Brazil’s Bovespa has been one of the top performing stock markets in the world this year, but you wouldn’t think it based on the chart below. Even after an epic rally this year, the index has yet to take out its 2014 highs, leaving it in a long-term sideways range. Will we see a breakout before the end of the year? We would expect at least a test of prior highs.
Russia’s stock market hasn’t exactly knocked it out of the park this year, but as shown below, the index has managed to break above the top of the long-term downtrend channel that it had been in for the past three years. Since that trend break, we’ve seen the market go completely sideways. When this sideways trend breaks — either to the upside or the downside — look for a violent move.