Potential KWEB ETF For 22 Sep 2023 Trade
I think market have been caught by Fed’s higher and longer position for the rate hike. It will be a challenge to expect a rate cut, not possible maybe until Q2 2024.
I have been observing how options data have been showing for past few days, before and after Fed decision to make the rate unchanged.
In this article I will be sharing on one ETF, $CSI China Internet ETF(KWEB)$ which caught my attention, it has a significant high %Calls to %Puts, and with a 189.79 Daily Vol%.
Let us explore this ETF and see if this is a potential good ETF for us to trade.
Assess KWEB On 50-day Moving Averages Period
KWEB is currently trading below the 50-day MA period and it does not show any signs of taking the upward move.
Could there be a reversal happening?
Assess KWEB On Parabolic SAR
From the Parabolic SAR, it does not seem to be having any potential reversal coming and it is showing a downside trend rather.
Assess KWEB On Relationship of KWEB Price to U.S. 10 Years Treasury Yield
As we know Treasury bonds sold off. The benchmark 10-year Treasury yield climbed to 4.49%, marking its highest level since October 2007.
Shorter-dated bond yields (deemed to be most sensitive to interest-rate movement) also rise, with the 2-year yield closing at the highest level since July 2006. The 30-year yield also climbed.
Could it be this reason why KWEB is having a higher %Calls compared to %Puts? If we look at options chain, we can see that there are quite a fair bit of contracts where strike price is higher than the current trade price of KWEB, the option would be out of the money and becomes worthless.
If we look at how KWEB is faring based on options data and also technical analysis, KWEB might moved higher as it has always do so when yield is trending upwards.
Hence, I would expect to see some upside on KWEB today (22 Sep 2023), but I would still monitoring its price action when trading start later.
Appreciate if you could share your thoughts in the comment section whether you think KWEB is worth investing or trading, with how it behave with rising yield?
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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