Dennis Gartman Bullish Interest 'Piqued' in Chinese Stocks

It's been a tough month for Chinese equities. Over the past month, the Deutsche X-Trackers Harvest CSI 300 China A-Shares ETF ASHR, an ETF that tracks the 300 largest and most-liquid stocks in China's A-share market, dipped 22 percent. Over the same time, the iShares FTSE/Xinhua China 25 Index FXI fell nearly 10 percent. Today alone, the ETFs dipped 2 percent and 3.6 percent, respectively, following news over the weekend that 21 Chinese brokerages pledged the equivalent of $19.3 billion to support large-cap stocks.

Simultaneously, Chinese government officials have halted IPOs, while the People's Bank of China has offered liquidity support. (Bloomberg has a great timeline here.)

In his Monday Gartman Letter, Dennis Gartman said that his interest in Chinese equities is "piqued" after trading on Friday. Gartman said that by the close of trading on Friday, shares on the Shanghai Composite Index fell "back to long term support." The chart accompanying Gartman's analysis shows that prices of the Shanghai SSE Composite Index have dipped more than 30 percent to support around 4,000. For Deutsche's A-shares ETF, that would correspond to levels around $40.

Gartman also said that shares in eight of 10 markets comprising his International Index have fallen. The two that have not – the U.S. and Canada. Specific to Asia, Gartman said that, "shares in Asia have fallen precipitously, led downward by the 2.4% declines suffered by shares in Japan and by the 3.2% decline suffered by shares in Hong Kong."