Today we will take a look at BABA. When do we think maybe a good moment to start adding Chinese stocks into our portfolio?
Of course, we will look at the answer from a technical perspective, and this is the conclusion we make:
a) We must see contact with the support level first (Is there buying pressure?)
b) If we see bullish pressure, that is the first sign those big investors may be adding again.
c) Ok, that's the first filter; the second filter is the breakout of the descending trendline. That would mean a change in behavior or sentiment. Now the price can stabilize and avoid the previous decreasing angle in price.
d) Cool, can I buy it now? You can buy whenever you want; however, we will not do that; we want to see our 3rd filter. Corrective Pattern after the contact on the support level + breakout of the descending trendline. It's pretty standard after we observer a breakout of a key level (in this case, the descending trendline), a lot of FOMO comes to the market. "Chinese Stocks are booming! I will not miss this..." And most of the time, those traders or investors get trapped on a correction.
e) So if all the previous filters happen, we will develop long setups on BABA.
f) Patience is key when looking for quality setups; you can't ask the market for opportunities; you need to wait until the market provides one.
investing in chinese stocks is a really bad idea
the ccp can just , without warning, decide that you no longer own the stock
that isn't even taking into account the corruption and human rights violations happening in china
they put uyghurs in concentration camps and harvest the organs of falun dafa practitoners, they silence dissidents and pay people to spread propaganda
would you have invested into nazi germany?
aeryan
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@GnosisLight I don’t think you understand the concept of ADR. Chinese stocks in the US are ADR, owners never been considered owners of the actual shares.
@moyeti who ever invests in ADRs should understand that there is always a risk of delisting by both US and Chinese regulators. There is a reason why Chinese ADRs are priced low now, the markets have embedded it in their prices. Both US and China have different arguments on ADRs. US regulators are unhappy with Chinese companies financial disclosure practices and Chinese regulators had never formally approved Chinese companies to list in the US. ADRs circumvents Chinese regulators .
The systematic risk involving any Chinese stocks is way too high for me.
With almost 21 real estate companies over-leveraged to the point of insolvency, there's no telling what's in store for the next 3 months. But let's be real, it does not look good.
the ccp can just , without warning, decide that you no longer own the stock
that isn't even taking into account the corruption and human rights violations happening in china
they put uyghurs in concentration camps and harvest the organs of falun dafa practitoners, they silence dissidents and pay people to spread propaganda
would you have invested into nazi germany?