Chinese ADRs - Still sleeping 😴

Market outlook 

Huawei recently launched its latest smartphone with 5G capabilities and advanced chip technology on a 7nm process. Additionally, the Chinese government has instructed officials to refrain from using iPhones during work hours. I believe that there will be more room for negotiations in the China-U.S. tech arena. However, heavy rainfall in China and Hong Kong last week caused economic disruptions. Both the Hang Seng Index and the A50 Index continue to be in a downward trend. It is necessary to closely monitor these markets. For now, it is not advisable to rush into buying until there are clearer buy signals.

Stocks analysis

For the reasons above, I am generally bearish for Chinese ADRs this week. For $Alibaba(BABA)$ Bearish, it's a dangerous sign to see the stock falls below its lower support of its uptrend channel. This might create further selling pressure from investors. 

BABA daily chart

Simlar to $iQiyi Inc.(IQ)$ Bearish, the chart is so bearish as the candle is well below all the critical ema lines, such as ema50 and ema200. Any rebound will only be a short term movement. The company also didn't delivered good results in its recent earnings call. 

iQiyi daily chart

However, the situation is totally different for $Pinduoduo Inc.(PDD)$ Bullish. Obviously, from the chart below, the stock is going very well and the uptrend is very healthy like a staircase shape. I believe the stock will breakout very soon despite the weak sentiment in Chinese market. 

PDD daily chart

The next stock to discuss will be $Bilibili Inc.(BILI)$ Bearish. It's a bearish for me since the stock starts to breach its critical neckline support at 14.42 USD. I think the downside will be huge for this stock, it's just a matter of time now. If to look at, the next support will be at 12 and 9 USD. 

Lastly, let's look at $JD.com(JD)$ Bullish. The overall trend is very very weak, therefore nothing much to discuss on this stock. I am bullish with it for a single reason only, that the stock is testing its recent 6 months bottom neckline support. We should expect a minimal rebound from this level this week or early next week. The rebound will not be long lasting, and it will continue to break new low I believe! 

JD daily chart

Conclusion

China has been consistently rolling out a series of policies to stimulate the stock market and the economy during this period. However, it seems that these policies have only provided foreign funds with an opportunity to sell at high levels. The stock market has clearly shown a trend of opening high and then trending lower. I believe China will need some time to assess the progress of its recovery. Although many companies with cheap valuations have emerged, it may take a long time for stock prices to recover.

Will you invest in Chinese stocks now or wait again and again???

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