There were no changes to the KraneShares models this week.

Bulls returned to equity markets in force on Monday after positive developments in trade negotiations between the US and China. US Treasury Secretary Scott Bessent announced Sunday evening eastern time that the US and China had reached an agreement to suspend reciprocal tariffs for 90 days following productive talks between the two nations in Geneva (source: cnbc.com). This brings tariffs down to a 10% baseline from each country, with an additional 20% tariff imposed from the US on Chinese goods relating to fentanyl, bringing the total US tariffs on China to 30%. Still, this is substantially less than the 125% level that had been reached due to escalating tensions after the beginning of April.

Chinese equities also saw strong rallies across the board after the 90-day pause was announced. The broad MCHI climbed over 3% intraday and is now testing its negative trendline that was initiated in April. More focused areas like the KraneShares CSI China Internet ETF KWEB saw sharper intraday moves of more than 5%. This fund has experienced some interesting movement over the past several months. It reached a multi-year higher at $39 back in October after the Chinese government announced large-scale stimulus measures. We then saw the fund experience increased volatility over the next few months, but it stayed well north of the pre-stimulus range in the mid-$20s. The beginning of 2025 saw consistent improvement with AI-related tailwinds that failed to push to the October 2024 level, only to have the fund turn back around when tariffs were announced. Again, the decline marked a higher low for the fourth consecutive time since early 2024, and we now see KWEB pushing back toward a test of its trendline in the mid-$30s. The current technical picture is mixed as KWEB carries a 3.48 fund score (prior to Monday’s move), but the recent improvement should be taken as a firm positive. Notable overhead resistance can be seen from $35.50 to $38.50, with additional resistance expected at the October 2024 highs of $39. Initial support can be seen on the default chart at $30 and $28.

The table below is a review of important technical data on a select group of KraneShares ETFs. Significant changes within the past week are highlighted in Green if positive or Red if negative. This portfolio is designed to be used as a "radar" screen to bring your attention to potentially important technical changes that may require your attention and potential action. When evaluating the Fund Score, the strongest issues have scores of 4 or higher while those ETFs with scores below a 3 are no longer considered solid citizens.

The distribution curve places each ETF on a bell curve according to their respective degrees of overbought or oversold status using a 10-week distribution. ETFs that are statistically oversold will appear on the left-hand side of the bell curve, while those that have become statistically overbought will appear on the right-hand side of the bell curve. Perhaps the most useful attribute of this feature is that it displays the entire universe on the curve at one time to give us a general picture of whether the KraneShares ETF universe is generally overbought on a near-term basis, or generally oversold. Our best opportunities are to buy strong relative strength ETFs that have regressed back toward mean conditions based on market weakness, or have become oversold based upon extreme market weakness. Weekly Distribution is a short-term gauge that is most helpful in timing entry and exit points, while the longer-term information of trend and relative strength is a more controlling factor in the decision of whether to buy or sell.

Legend:

• UPPERCASE indicates that the RS chart is on a buy signal.
• lowercase indicates that the RS chart is in a sell signal.
• GREEN lettering indicates the ETFs trend chart is on a buy signal.
• RED lettering indicates the ETF is on a sell signal.
• Box Color indicates the Sector Status Rating. Green = Favored, Yellow = Average, and Red = Unfavored.

The KraneShares Dynamic China Rotation Model is designed to identify major themes in the Chinese marketplace through the use of the Point & Figure relative strength tools. For more information on the portfolio construction and back testing, see the model info file on the models page.  (Note: The KraneShares ETF Models will be updated Tuesday mornings by 9:30 am EST) 

Weekly Changes: 

* - Dates prior to 10/15/2019, which is when the KraneShares Dynamic China Rotation Model became available on the NDW Research Platform, are representative of when the position was added to the backtested model.