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What hard landing? Chinese stocks are surging

Despite all the talk of a hard landing in China, the Chinese stock market appears poised for a serious breakout.

The iShares China Large Cap ETF, better known as the FXI, has seen some sizable gains over the past month, rallying around 6 percent, and is trading at the highest levels since the start of the year. The index is also above both its 200-day moving average and 50-day moving average.

(Read: China confident it has done enough to keep growth above 7 pct)

So, is this just a head fake? Or is now the time to invest?

"When we are talking about China or EM, more broadly speaking, breakout is a very relative term here," said Richard Ross of Auerbach Grayson. "It's really been a tale of two halves here for five months of the year. As good as it's been over the last two months, it was that poor to start off."

In the short term, Ross projected a measured upside to around $40 or $41 dollars per share, but stressed that investors should proceed with caution.

"The problem I have with China, or the FXI ETF, is when you pullback and look at it longer term," he noted. "We're still entrenched within a very well-defined downtrend from the 2010 high. And more importantly, we're still constrained by this trading range."

To Ross' point, the FXI has traded in a $10 dollar range between roughly $30 dollars per share and $40 dollars per share for the better part of five years.

(Watch: Lynn Tilton: Manufacturing revolution going on)

"You want to be careful here," said Ross, who advised the FXI should be treated as more of a trading buy than a compelling investment, "I still think the longer term trend is down."

Kevin Caron of Washington Crossing Advisors agrees that the long-term picture for China, and emerging market space as a whole, remains muddy.

According to Caron, China as a country and an investment, has benefitted from the easy money policies in the United States. "China has been an engine for growth since 2009, but growth in social financing and credit is increasing leverage beyond a healthy or sustainable rate," he noted.

"We're not comfortable that we've seen enough signs of a turn fundamentally, particularly out of China."

Check out the video above for the full technical and fundamental view on the FXI.

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