On the recent Friday, Chinese tech stocks stage an expected rally before we end the week of public holiday for China.
Pinduoduo has displayed unusual strength with a price rally of over 7 percent overnight. In comparison, Alibaba and JD.com rally around 3 percent. Generally speaking, Chinese tech stocks going up by around 3 percent is not unusual on Friday since the Chinese tech stocks experienced a drop in price since Tuesday this week.
Is this a rebound of retail stocks e-commerce platforms as Chinese retail improves? Has Chinese economy bottomed? What is surprising is a surprise rally of Nasdaq 100 which jumped back fiercely on Friday, with futures jumping above 15.1k. This is almost a 2 percent rally which came from an initial drop of the futures to around 14,730 points...
Chinese stocks have recently made lower lows in recent days for this year. This is worrying for stocks with poor price structure like JD.com and meituan..
If these two stocks do bottomed and show back a fierce rally then it is a good signal that the wave up is at least strong till another critical price point.
On a side note, I had made some small profit from China A50 this week before Chinese markets open next week.
As always, this should not be construed as any investment or trading advice.
$XIAOMI-W(01810)$ $Pinduoduo Inc.(PDD)$ $JD.com(JD)$ $Alibaba(BABA)$ $FTSE China A50 Index - Oct 2023(CN2310)$
Comments
JD.com is likely to suffer from it for some time, being an e-commerce giant that is very sensitive to macroeconomic shocks.
Taking into account the fundamentals, I think it is worth getting into the stocks at current levels.
The Chinese government is keeping rates low so any drop in chinese stocks is a buying opportunity.
I see no reason for China stocks to drop because interest rates in the US have gone higher.
Alibaba remains a risky investment, for any investor outside of China.