China: Where is the bottom? Let's look at Tencent
Some reasons why we're probably near a bottom with Chinese equities, +/- 10-20%
1) Since 2013, price has consistently respected the trendline - no different than a standard demand curve in economics. Trendlines are demand for price over a period of time and they work best when price revisits them often and shown to bounce after.
2) We also have the 200 week moving average that supported price during the correction of 2018 (President Donald Trump's trade war with China & the slowdown in global economic growth / concern that the Fed was raising interest rates too quickly)
- The 200wma also supported price during the Covid meltdown of 2020.
3) 2018 and 2020 resistance is now structure support + notice the gap that was just recently filled during yesterday's waterfall decline.
4) Tencent has retraced about 76% from the former impulse low to high, which is a standard deep retest in a correction (61.8% - 76% on the deeper end).
5) FXI is the Chinese large cap ETF - notice it hit the 200 Month moving average and bounced. You could see that here:
No position yet, but may be interested in LEAPS. Easier trades out there IMO... but if holding, this is definitely not a place to sell. Expect chop and time to base. V shape recovery is also possible here (but unlikely in my view due to sentiment damage and headline risk).
GL
1) Since 2013, price has consistently respected the trendline - no different than a standard demand curve in economics. Trendlines are demand for price over a period of time and they work best when price revisits them often and shown to bounce after.
2) We also have the 200 week moving average that supported price during the correction of 2018 (President Donald Trump's trade war with China & the slowdown in global economic growth / concern that the Fed was raising interest rates too quickly)
- The 200wma also supported price during the Covid meltdown of 2020.
3) 2018 and 2020 resistance is now structure support + notice the gap that was just recently filled during yesterday's waterfall decline.
4) Tencent has retraced about 76% from the former impulse low to high, which is a standard deep retest in a correction (61.8% - 76% on the deeper end).
5) FXI is the Chinese large cap ETF - notice it hit the 200 Month moving average and bounced. You could see that here:
No position yet, but may be interested in LEAPS. Easier trades out there IMO... but if holding, this is definitely not a place to sell. Expect chop and time to base. V shape recovery is also possible here (but unlikely in my view due to sentiment damage and headline risk).
GL
評論:
No position yet but decent bottom developing