Cake 1 – Tesla
Despite challenging 2020~2021 with components, batteries and semiconductor supply chain disruptions and labour crunches brought about by pandemic and other issues, $Tesla Motors(TSLA)$ continued to outperform with record 71% increased EVs deliveries in recent quarter, and its profitability is now approximately 3 times greater than its top 3 legacy competitors, Volkswagen Group, Toyota Motor and Daimler.
Looking Springy and Delectable
Besides large market caps, higher growth and profitability which would sustain the company in the long run, one important area to look at for longer term investment is resiliency of the company to overcome downturns, and bounce back stronger. TSLA has shown it could weather the recent storm, and more analysts are of the view that TSLA offers a convincing long-term investment.
If interested in details expanding from my brief summary about TSLA, read these two posts:
Is Tesla A Smart Long-Term Buy?
Tesla Stock Retains Long-Term Potential Despite Growing List of Concerns
Is TSLA Price Tempting Now?
TSLA Fundamentals look attractive but is the price right to buy now?
A quick look at Technicals, using moving averages (MA) on weekly charts, shows price action is above all the major 50,100, 200, 250 MA trendlines, supported and bounced up from 50MA. One could use other patterns and indicators for confirmation too, but a possible long entry setup exists!
TSLA Weekly Chart
Cakes 2 – Alibaba, Tencent, JD, Meituan and NetEase
The China Tech titans are still growing revenue and market share, even if momentum has slowed and they lost massive capitalisation, weighed down by pandemic lockdowns, regulatory crackdown by China authorities, and threat of delisting if failed to meet US audit requirements.
In my view, the regulatory crackdown related to anti-trust, ‘disorderly expansion detrimental to consumers’, and data security might just be the ‘bitter medicine’ needed, to help the Tech titans ‘clean house’, and put them in better footing to clear the US disclosure audits.
Alibaba and Tencent combined have lost $1.1 trillion in market value over last year, which would explain why theirs and other titans total market cap is now less than Tesla’s $792 billion.
However, their Fundamentals showed they are still some of the best performers due to their wide-moat, with 'resiliency and longetivity' over 5 years or more. For more details, read the deep dive of BABA by @Thomas Chua as an example, and Morningstar article on their wide-'economic'-moat (thanks @surfer guy for sharing link).
Tencent, Alibaba Have Erased $1 Trillion in Value Over Last 1-year
Alibaba - Deep Dive
Morningstar: Chinese wide-moat stocks at a discount
Looking for Cherries on Top of Cakes
The turnaround for Chinese Tech titans seems to be at hand with Chinese and U.S regulators reported they are cooperating on deals to ensure proper listing in both markets. Investors cheered the news too, with stocks posting double digit % gains in price since the announcement on 16 Mar. Read below if you missed the news:
China to Address Market Concerns about Offshore Listing Rules
Is it time to buy the Chinese Tech Titans?
Using Technicals for BABA, price is still way below all 50,100, 200, 250 MA, so not the right time to buy BABA yet...
BABA Weekly Chart
Scanning the charts of other four, only $JD.com(JD)$ and $NetEase(NTES)$ have very similar price action and probable setups for long term investors. With price above long term support 200, 250 MA, if price could consolidate and clear the shorter 50 and 100 MA, that would give greater confidence of uptrend resuming once again for these Titans.
For buy and hold long term investing, if we could also enter at better price for Fundamentally strong stocks, that would be a bonus – the ‘cherries on top of cakes’.
JD Weekly Chart
NetEase Weekly Chart
Having my Cakes and Eat them too
While it’s fun to pit Tesla against the Chinese Tech titans or giants and decide the better investment option, when it comes to actual investment, I would invest in both Tesla and Chinese Tech Titans, to increase probability to profit from all their upside and hedge my risks, literally having my cakes and eat them too!
Of course, above not investment advice, just my humble analysis to provide context and supporting points, hopefully could be 'a piece of cake’ for one newer to TA? Please Do Your Own Due Diligence (DYODD) before investing and oh, before you decide to eat or not to eat, that next piece of cake as well.
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