Is it time to invest in China?

7 oct. 2021

KWEB is a China technology based ETF.

Top 10 holdings by weight:

• Tencent Holdings ~ 10.62%
  
• Alibaba Group Holding ~ 10.32%
  
• JD.com ~ 7.21%
  
• Meituan ~ 6.99%
  
• Pinduoduo Inc ~ 6.97%
  
• NetEase Inc ~ 4.71%
  
• Baidu Inc ~ 4.27%
  
• Bilibili Inc ~ 3.83%
  
• Trip.com Group ~ 3.82%
  
• JD Health International ~ 3.32%
  

Fundamental Analysis

• China’s stock market pullback this year has been in line with the average annual drawdown (approximately 30%); historically, this volatility has tended to produce double-digit annualized gains.
  
• In terms of seasonality, over the past 20 years, October has been amongst the strongest months for the Chinese stock market.
  

Technical Analysis

• The 50sma has been tested as resistance 3 times before. A breakout above the 50sma could signal a significant change in trend.
  
• The RSI has shown a positive divergence, as the last three times, we tested the horizontal line (blue arrow), in each case RSI is showing higher lows.
  

8 oct. 2021

Note

First break-out of the 50sma in over 6 months.

19 oct. 2021

Note

Break of the 50sma is successful, as we test it as support and have stayed above there for over 5 trading days now.

27 oct. 2021

Note

testing 50sma

sentiment getting worst but price is king

24 nov. 2021

Note

Price entered a range.

We could see some accumulation.