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China ETF (PGJ) Hits New 52-Week High

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For investors seeking momentum, Invesco Golden Dragon China ETF (PGJ - Free Report) is probably a suitable pick. The fund just hit a 52-week high — up roughly 43.9% from its 52-week low of $30.67/share.

Does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

PGJ in Focus

The underlying NASDAQ Golden Dragon China Index is currently comprised of 38 U.S. exchange-listed stocks of companies that derive a majority of their revenues from the Peoples Republic of China. The fund charges 70 bps in fees (see all Asia-Pacific (Emerging) ETFs here).

Why the Move?

The CSI 300 of Shanghai- and Shenzhen-listed companies touched their highest level since February 2018. This happened because China’s central bank injected about $115 billion into the country’s financial system by slashing the reserve requirement ratio for commercial lenders across the board by 50 basis points. Meanwhile, a survey indicated continued improvement in China’s manufacturing sector. All these positive news flows explain the latest high in the fund.

More Gains Ahead?

The fund has a Zacks ETF Rank #3 (Hold). However, it has a positive weighted alpha of 37.20, which gives cues of further rally.

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