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$BABA buy zone 👁‍🗨*This is not financial advice, so trade at your own risks* *My team digs deep and finds stocks that are expected to perform well based off multiple confluences* *Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management My team wants to start a good-sized position at the buy zone depicted on the chart. We either buy here or not at all. !! This chart analysis is for reference purposes only !! If you want to see more, please like and follow us @SimplyShowMeTheMoney
NYSE:BABALong
by SimplyShowMeTheMoney
$BABA my team is underrated 👁‍🗨*This is not financial advice, so trade at your own risks* *My team digs deep and finds stocks that are expected to perform well based off multiple confluences* *Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management* We've been here before. My team isn't expecting to lose this trade, but if we do it would only put a small dent into the 35% gain that we've already acquired. Our Entry: $111 Take Profit: $128 Stop Loss: $102 If you want to see more, please like and follow us @SimplyShowMeTheMoney
NYSE:BABALong
by SimplyShowMeTheMoney
6
Event-Driven Strategy on Binary OutcomesCBOT:ZS1! Last week, I laid the groundwork for a new idea on event-driven strategy. Event-Driven Strategy Focusing on Global Crisis. Three-factor Commodities Futures Pricing Model and Game Theory Matrix were introduced, illustrated with my own experience trading COMEX Gold Futures (GC) during the US-China trade conflict in 2019. My idea was featured on Editors’ Picks, generating over 16,000 views and nearly 800 likes. Today, I would expand my idea to traders who want to construct their own event-driven strategy, in a 3-step approach. Firstly, to qualify as a crisis, it needs to have the magnitude to shock the global market. Below is a few examples of global crises in the past five years: • US-China Trade Conflict (2018): The two countries account for 42% of global GDP and have a combined population of 1.7 billion people, 22% of the world total. New tariffs imposed on thousands of goods with multi-year cumulative amount reaching $2 trillion. • African Swine Fever (2018): It reportedly wiped out 60% of the pigs in China. Supply shortage from the No. 1 pork producer sent pork price up 300% in China. Global markets from the U.S. to Europe also felt the pain, as meat prices went up across the board, affecting pork, beef, lamb, and poultry. • Brexit (2019): The withdrawal of Great Britain from the European Union resulted in a loss of 20% of GDP and 13% of population in the world’s third largest economic block. The impact on Britain itself is less than certain, as it would trade less with EU members, and more with countries outside of Europe. • COVID (2019): The Coronavirus outbreak has turned into a global pandemic, and dramatically changed the world and our lives as we know it. • Trump defeated in the U.S. presidential election (2020): It put a stop to the “America First” policies. In just four years, U.S. political landscape has once again swung widely. • Russia-Ukraine Conflict (2022): First major military conflict in Europe since WW2. In addition to the hundreds of thousands of casualty and millions of refugees, the ongoing conflict disrupted the global supply of energy and agricultural products, sending US inflation to a 40-year high. • Lockdowns in China (2022): Dozens of Chinese cities have been under some form of lockdowns in recent months, affecting a quarter of its population. It also created huge bottleneck in global supply chain, sending rippling effects around the world. Secondly, analyze the impact of a crisis and attempt to define it in binary outcomes. These outcomes must be mutually exclusive and collectively exhaustive (MECE). If you are unclear of the outcomes, or there are too many of them, it would be difficult to construct a trading strategy around the crisis. Riding on the above examples of crises events, we will have their binary outcomes as follows: • US-China Trade Conflict: Fight or Talk (alternatively, Tariff or No Tariff) • African Swine Fever: Contained or Spread Out (Not Contained) • Brexit: Approved or Not Approved • US Election: Democrats Win or Republicans Win • Ukraine situation: Putin Wins or Putin Loses (Peace deal is considered a Loss for Russia) • China’s Zero-Covid Policy: Shanghai Lockdown or End of Lockdown Thirdly, search and identify financial instruments that are most affected by the crisis. How do you know which is the right one amid a wide range of financial instruments? A quick test is to observe whether its price change correlates to the binary outcomes of the crisis. In a classical supply and demand diagram, fundamental drivers move price up or down along the supply and demand lines in a continuous fashion. A crisis event shifts the lines to the left or to the right, pushing sudden price bumps as the event hits the news headlines. Deep dive into the trade conflicts between China and the U.S., we can deploy the event-driven strategy on a commodity directly impacted by tariff. Interestingly, it was not a Chinese commodity tallied by Mr. Trump, but a U.S. commodity being taxed by China – Soybeans produced by U.S. farmers. On April 2nd, 2018, the Trump administration announced that it would impose 25% tariffs on about 1,300 industrial, technology, transportation, and medical products made in China. In less than a day, China responded by imposing a 25% tariff on 106 goods in 14 categories, including soybeans, automobiles, and chemicals originating in the U.S. Following China’s announcement, CBOT Soybeans Futures (ZS) dropped 2.2% and touched a low of $9.83/bushel. In my view, the initial price down was an understatement. I believed that CBOT Soybeans could go a lot lower with the tariff making the U.S. grains less competitive than those from South America. Over the next week, I put in Short ZS Futures positions, mainly on back-month contracts. Here are the logics behind my trades. As the world’s largest consumer and importer of Soybeans, China imports 85% of its soybeans for domestic consumption to meet the huge appetite in cooking (soybean oil) and animal feeds (soybean meal). United States is the largest producer and exporter of Soybeans, with 68% of its export going to China. Tariff takes time to impact the market fully. At first, Chinese importers expedited purchase of US soybeans ahead of the tariff deadline. They also increased buying from Brazil and Argentina. Eventually, when the cheap grains were exhausted and inventory was depleted, they would be forced to buy from American farmers again. The higher price with tariff would encourage use of alternative ingredients and reduce the overall Chinese demand on soybeans. This prediction has been proven to be on the right track, as CBOT Soybean Futures continued to decline in the next three months until it hit $8.00/bushel, down 20% from levels before the tariff. Let’s rework the Soybean trade using our 3-step approach. Firstly, Does it have the magnitude to shock the global market? Yes. 40 million metric tons of soybeans, or $15 billion a year, would be taxed by China. It had huge negative impact on U.S. farm incomes. Secondly, could we define the Soybean tariff as an event with binary outcomes? Yes, it is either “Tariff On” or “Tariff Off”. If the tension escalated, tariff would stick and become a permanent part of soybean cost. On the other hand, if US and China started a trade talk, soybean tariff could be removed later. While the tariff impact on nearby futures is fixed, it is not so on back-month futures prices. Thirdly, is Soybean Futures the right instrument to use? Let’s apply our three-factor commodities pricing model on soybean, as follows: Soybean Futures Price = Soybean Cash Price + Market Sentiment + Probability of Tariff In a “Tariff On” scenario, the probability of tariff increases to 100%. While production cost in the U.S. is not affected, Chinese exporters must pay 25% more to buy. The reduced demand for U.S. soybean has the net impact of pushing futures price down. Therefore, the sign of Tariff Premium should be negative in the case of soybean futures. In a “Tariff Off” scenario, trade talk could reduce the probability from 100% to 25%, for example. A signal of Chinese demand recovery has the net impact of raising futures price up. Typically, about 1/3 of US soybean, or 40 out of 120 million metric tons of the grain, is exported to China every year. This sheer size made tariff a dominant factor driving soybean price, outweighing fundamental factors such as planted acreage, weather, and yield. This concludes the use of US-China Trade Conflict as a case study for applying the event-driven strategy. My next writings would explore new strategies on more recent event shocks such as the lockdowns in China and the Ukraine situation. Meanwhile, please tell me what you think, either on TV or by email. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Editors' picks
CBOT:ZS1!Long
by JimHuangChicago
8
HSI rebound rally will be slowed by profit takerWhile my view toward HSI remains bullish since the end of May after the index has decisively surged through its major resistance of the 50 days moving average, one need be aware that the index has entered a choppy zone due to the emerging selling pressure from profit taking of short term traders. That said, one should avoid breakout buying as higher price might trigger more profit taking orders causing slow down in upside price movement. No matter how affirmative one is, it is always important to keep your head up for potential developments that are aligned with, or against your point of view. Overconfidence will turn intuition into “into-wishing” . Below are some of the actions I would closely follow in the coming weeks to detect market sentiment change: 1. Market reaction after the US CPI and FOMC rate decision Last Friday the worse than expected US CPI figures pushed down the US equity market. Asian equity index futures (such as HSI, A50, NK225) in the night after-hours trading session also reflected the plummet. However, no matter how risk-off it was on Friday, it is worth noting that all of the 3 major US equity indexes ( SP:SPX , DJ:DJI , NASDAQ:NDX ) actually didn’t even reach the May-20 low. That means the CPI surprise indeed was not so surprising that it provided no new information to the market. What we need to observe is how the market moves when it reopens on Monday. However, major movement might only come after Thursday’s FOMC rate decision. 2. Chinese investors risk appetite Compared to HSI, Shanghai Stock Exchange Composite Index (SSE Composite Index, SSE:000001 ) better reflects Chinese investors sentiment. SSE Composite Index has creeped back up to the 2022-Apr rebound peak level around 3290. At this major resistance level, the market will require positive news or policy release to sustain the bullish sentiment in order to surge through, otherwise the natural profit taking force will drive the market into consolidation or even reversal. With the increasing correlation between Hong Kong and the Chinese stock market, any change in Chinese participants' sentiment can move HSI greatly. 3. Non-Chinese fund FOMO buying of Chinese tech If follow the Southbound fund flow from China to Hong Kong closely, 4 weeks ago Chinese investors actually have started to rebuild their position in major tech firms such as Meituan HKEX:3690 and Kuaishou HKEX:1024 (Note: Alibaba HKEX:9988 is not available for direct purchase by Chinese investors due to secondary listing and weighted voting right issue). Only until the recent 2 weeks after the earnings release of Alibaba and Meituan, non-Chinese investors finally woke up from the Chinese bearish dream and started FOMO buying. An interesting observation is that since last Thursday when HSI briefly touched 22100 level, Chinese investors have turned from net buying into net selling of Chinese tech firms. That means for the past 2 days, Chinese investors were effectively selling the stocks to the non-Chinese. Once the non-Chinese find out they are the only one buying, there might be some retracement until the price at which Chinese players are comfortable to start loading up their position again. 4. Risk of China new round of lockdown Only 10 days after the end of Shanghai lockdown, Shanghai is restarting mandatory mass testing across districts over the weekend. Whether this event is a false alarm, or will evolve into a new wave of city lockdown is a major uncertainty. While most of the upside is already priced in from the current rally, one should actually prepare the sharp reversal to the downside when risk of lockdown emerges.
HSI:HSI
by geoffreyip523
BABA is going for a solitary run.I am not a fanatic of BABA and to be honest, I was waiting for it for around 60$, but this last next week BABA has shown strength in one of the worst times ever for the markets when usually this stock down performs always NDX. This last week BABA broke the channel that it has been into since historical maximums. Not only that, but the price was minting and has broken decisively above, backtesting the level and losing just 0.3 percent as the NDX plummeted 3% when it would have ordinarily fallen 9 or 10%. It has not only broken the channel but is also above an important level with a volume below it, indicating that we might consider purchasing (for a stretch, not in the long term). It's too early to predict what will happen to BABA, but since China is pouring money into its market as if it were free, it's likely that BABA draws something like shown in the chart. A stock that has gone poorly in the last year is showing now a lot of divergences. If the scenery is correct (let's see that the price does this next week in order to validate it) It may be a 50% change from the present price, which is significant.
NYSE:BABALong
by Joia_
1
RBA and China Are Bullish For Aussie- Elliott wavesAussie is trying to wake up as RBA started hiking rates while China is going out of lockdowns in June, so seems like wave C is already in place, unless this is still a higher degree leg A from the 0.7661 highs. Well, at this stage it's too early to confirm any new long-term bottom, but at least in the short-term we should be aware of more upside after recently broken trendline resistance in the first leg, so more upside can be coming after pullback. Support is at 0.7/0.7030 which can be also a base of a right shoulder on 4h chart. Also, HSI has made a nice turn up recently which can be positive for the Aussie.
Long
by ew-forecast
Tencent Holdings Ltd. (700-HK, BUY)1Q Miss and COVID Likely Delays Recovery, but Easing Regulations Should Support Investor Sentiment; Maintain BUY and Decreasing PT to HK$400 HKEX:700 We are maintaining our BUY rating but decreasing PT to HK$400 (was HK$475) after Tencent reported 1Q earnings miss and implied continued macro challenges for 2Q. Domestic game revenue declined 1% y/y. Int'l game revenue grew 8% CC y/y (vs. +24% in 4Q, excluding onetime accounting adjustments), accounting for 24% (flat y/y) of total game revenue. Advertising revenue took the biggest hit from COVID lockdowns and declined 18% y/y (vs. -13% in 4Q). FinTech+Cloud growth also decelerated to +10% y/y (vs. +25% in 4Q). On the last earnings call, mgmt. indicated a recovery could happen in 2H. But given the prolonged lockdowns in some cities including Shanghai and the weakness in recent macro data, we think the recovery will be further relayed to 4Q. In 1Q, the company repurchased 8,864,400 shares for approximately HKD3,697 million. Overall, while the operating environment will likely remain challenging in the near term, we believe that, with strong operating cash flow, Tencent is better positioned to take the opportunity to build around its long-term strategic areas such as int'l games, Video Accounts, and SaaS offerings. Moreover, while it will take time to see the benefits, the Chinese government is easing regulations for the digital economy, which should give investors more confidence in the sector
HKEX:700
by TigerBrokers
$BABA out with a 35% gain! 👁‍🗨*This is not financial advice, so trade at your own risks* *My team digs deep and finds stocks that are expected to perform well based off multiple confluences* *Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management* Recap: On 5/19/22 my team purchased shares of Chinese online and mobile commerce company Alibaba $BABA at $88 per share. Our initial take profit was $118. We sold 1/2 at $117 and the rest several minutes ago at $121 which brings our take profit average to $119 for a 35% gain! Congrats to those of you who took this trade! We sold out but our overall consensus for $BABA remains bullish! Good luck to longs! Our Entry: $88 Take Profit Average (HIT): $119 If you want to see more, please like and follow us @SimplyShowMeTheMoney
NYSE:BABALong
by SimplyShowMeTheMoney
2
$BABA china fights to boost economic growth 👁‍🗨*This is not financial advice, so trade at your own risks* *My team digs deep and finds stocks that are expected to perform well based off multiple confluences* *Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management* Today my team purchased shares of Chinese online and mobile commerce company Alibaba $BABA at $88 per share. Our take profit is $118, which is a 34% increase from current levels. The Chinese economy is desperately in need of a boost. A cut on lending rates is expected to be announced tomorrow. This will boost credit demand and take some weight off of the economic slowdown due to COVID-19 interference. Good luck to all! Our Entry: $88 Take Profit: $118 If you want to see more, please like and follow us @SimplyShowMeTheMoney
NYSE:BABALong
by SimplyShowMeTheMoney
4
Radar recap before the breakoutPROFZERO'S TAKE - RADAR RECAP Ever since the very first edition of our daily Parlay, Profs have repeatedly cited their radar to keep track of ongoing macroeconomic developments and forming views. It's about time then for a first full-blown recap of what we are looking at right now, and how do we see the next steps moving: World politics: The war in Ukraine has reshaped European geopolitics, forcing the EU to rethink its entire energy supply and security policy off from Russia, other than bringing the continent back to reassessing the readiness of its armed forces. The blockade of the port of Odesa exacerbated supply-chain tensions that had been simmering since 2021, pushing commodity prices to all-time highs in energy and fertilizers and ushering the risk of famine and social unrest in the Middle East and Africa due to shortage of cereals and calories at large. Meanwhile, the relationships between the U.S. and China remain tense over Taiwan, as the island remains exposed to a potential Chinese invasion - Bearish Monetary policy: Central banks around the world have finally taken inflation seriously, launching interest rate hike and balance sheet trimming plans in an attempt to cool price surges and yet preserve growth and employment in the real economy. U.S. data in May were in fact supportive, with Main Street adding 390,000 jobs and keeping unemployment as low as 3.6%. Yet, the effects of higher interest rates are going to be felt only as they trickle down through the economy, in the form of costlier mortgages for homeowners and more expensive or altogether barred access to debt financing for sub-investment grade nations and corporates. As a result, defaults could sweep the economy, as already seen by the failure of Sri Lanka to pay its foreign-currency debt; the looming default of Russia; and the collapse back in 2021 of Chinese constructions giant Evergrande - Neutral Equities: The secular bull run hit by equities since the fall of Lehman Brothers in 2008, and fueled by loose monetary and fiscal policy on both shores of the Atlantic, hit a major stop in Q1 2022, when investors rushed to the door, spooked by the prospects of Regulators draining liquidity from the system. As a result, Nasdaq plunged 30% from peak (November 2021) to trough (April 2022), while S&P 500 only teetered on the brink of a bear market (negative 19.9% peak-to-trough). Investor fled Growth stocks whose profits are deep in the future, hence exposed to greater discounting by higher interest rates, favoring Value equities thanks to the solidity of their balance sheets and capacity to generate income via dividends. ProfZero argues that within the very Growth space, Value-like equities do already exists - tech giant Microsoft (MSFT) for instance is America's best-rated company (AAA/stable) - Neutral Commodities: After a lost decade, and crude oil trading even in negative price territory for one day in 2020 (April 20, WTI crude contract settling at negative 37.63/boe), commodities came back roaring in 2022, in what analysts at Goldman Sachs have already dubbed the beginning of a new supercycle. ProfZero concurs that commodities - and their supply chains - have been taken for granted for too long; now, in the wake of de-globalization talks, developed as well as emerging economies find themselves rattled by the prospects of unsustainably high - or even unaccessible - key commodities like fuel and fertilizers, or even worse calories. Thinking one step ahead, ProfOne has set its eyes on the minerals of the future - cobalt, lithium and nickel - reminding that these are also highly concentrated in a handful of areas around the globe, thus possibly falling into the same supply trap of the commodities of the past century - Bullish Blockchain assets: A unprecedented "crypto winter" has gripped investors in the blockchain space, first sending BTC from all-time at USD 68,990 in November 2021 to USD 25,350 on May 12, 2022 (63% peak-to-trough), then decreeing the collapse of Terra/LUNA project in just 3 days on the second week of May this year. Yet, the blockchain space is showing remarkable resilience, with BTC resisting further slides and in fact potentially preparing for a new "golden age", as foreseen by venture capital fund Andreesen Horowitz. ProfZero remains focused on the superiority of the blockchain as a technology, capable to shape the next decade in information processing, automotive, entertainment, finance and healthcare - Bullish
CME:BTC1!Long
by ProfZero
China ETF GXC pre-launch testPreviously been highlighting China, particularly as Chian equites have been misunderstood, maligned, and assumed to have downside due to their tough COVID-19 strategies. As expected, GXC launched with a gap up. However, this gap up did not translate further into a gap and run, but instead stalled. In view of the overall technical picture, it appears may have formed the last triangle pivot point. Hence, the triangle has been adjusted accordingly, from previous. The weekly chart has nice technicals with RPM and MACD crossing over upside. Would have preferred a more bullish candlestick for the week, but that did not happen. The daily chart has a gap and stall, and this is likely to pan out with a retracement close and reopen the previous gap. Possibly to reconnect with the MA band, and then the real launch with a triangle breakout at the end of June. Path sketched out there. Bullish but need some more baking time...
AMEX:GXC
by Auguraltrader
Rebound is around the corner for Chinese developersLast week we discussed the scenario of Hong Kong/China equity rebound due to the political environment change in China. HSI did end up close above the May open, creating a hammer candle in the monthly chart, and stood atop the 50 days moving average. Both showed strong bullishness from the chart perspective (Last week note here: ) As a continuation of the rebound story, earlier there were some developments on the Chinese developers front, which there might be a distress revaluation opportunity for traders to make bets on . Update on Chinese Developers After almost 2 years since the Chinese government imposed “3 red lines” rules on developers, which later leaded to the Chinese high-yield bond collapse in 2021 (majority of Chinese high-yield are issued by the Chinese developer), on May-17 the Chinese government finally showed sign of relaxation on the crackdown, by supporting some developers to issue domestic bond to ease their cash insufficiency . This development is under the backdrop of Chinese economic slowdown, as well as poor monetary/fiscal policy transmission capability with weakened property market. As of today, there are 5 non-state-backed developers that have confirmed on the domestic bonds issue: Longfor (HKEX:960) Country Garden (HKEX:2007) Media Real Estate (HKEX:3990) CIFI Holding (HKEX:884) Seazen (HKEX:1030) Note that investors of the newly issued bond also have the option to get protection by purchasing the credit risk mitigation warrant (CRMW), of which China Securities Finance Corporation (state-owned) is the underwriter of the warrant . The important message here is that, in order for the Chinese government to take a “short-put” position, they must have vetted the Chinese developer names and shortlisted the above 5 companies for the most solid fundamentals (and political correctness). Essentially, the Chinese government is doing stock picking for us . Among this batch of developers, I would recommend Longfor (HKEX:960) and Country Garden (HKEX:2007) . In the sector-wide distressed situation, companies with more deployable cash or financing capability actually have the optionality to acquire and consolidate weaker developers to strengthen their future market share. Longfor and Country Garden are the largest and healthiest financials among the list. Comparing Longfor (HKEX:960) and Country Garden (HKEX:2007), the former actually have demonstrated stronger confidence among investors as one can tell from the severeness of price decline for the passed year. Hence if you are a less active investor who wants to buy this idea, go for Longfor (HKEX:960); for those who have the bandwidth for active management, Country Garden (HKEX:2007) might have more room for trading around positions with leverage. Trading Plan for Country Garden (HKEX:2007) Albeit the fact that I am writing a long side execution plan, please note that the stock technically is still in a bear trend, which we still see selling pressure near 20 and 50 days moving average . Hence this is not a trend following, but reversal-plus-breakout play, where more time is needed for the turnaround and breakout from the downtrend resistant levels . Right now the stock is flirting around the 20 days moving average. One might want to place some protective bet at current level (in case of sharp upside movement with overnight news), or wait for the following 2 key level for turnaround confirmation: 5.4-5.8 : 50 days moving average and May-3 spike 6.75 : Rebound peak from March market plummet For the bearish trend to continue, the stock must go through the 2 recent troughs. According to the trader’s conviction to the rebound stock, one might choose to scale in (i.e. average down the position cost) or scale out (i.e. partial cut loss) the position at these levels: 4.1 : May-12 bottom 3.3 : Mar-16 bottom, lowest price made in march market plummet In terms of trading vehicle selection, apart from holding the stock outright, good news is that Country Garden (HKEX:2007) also has stock options available for trade. By using call option one can be immune from sharp drawdown in case of overnight bearish news, also better cash management for the natural leveraged nature of options. Note that Hong Kong listed stock options are less liquid compared to those in the US, I would recommend to choose expiration less than 3-4 months for narrower spread and more active quotation .
HKEX:2007Long
by geoffreyip523
Did someone forget we are in a bear market?INVESTMENT CONTEXT JPMorgan CEO Jamie Dimon stated at a banking conference that investors should brace for a "hurricane right out there down the road and coming our way" At the same conference, Wells Fargo's CEO Charles Scharf added "the scenario of a soft landing is (...) extremely difficult to achieve in the environment (...) we're in today" U.S. manufacturing data for May positively surprised, with the index declining to 56.1 vs. analyst expectations of 54.5 - demand apparently remains strong even amidst supply-chain constraints choking retail Italy's natural gas distribution leader Snam bought a floating regasification terminal with capacity of 5 billion cubic meters a year from Golar LNG as efforts to diversify energy supply off from Russia gain pace President Joe Biden is expected to be visiting Saudi Arabia later in June to discuss greater OPEC+ commitment to lift crude oil production in a bout to lower prices PROFZERO'S TAKE Equities are failing to keep up the rebound attempted last week, on the back of still weak fundamentals and waning technical support - Nasdaq testing the 12k mark in particular testifies that a much-awaited bounce back in tech stocks simply can't hold for now. Tellingly, Jamie Dimon's meteorological metaphors muted from "big storm clouds" just on May 23 to a "hurricane"; ProfZero won't broadcast on The Weather Channel, but definitely concurs the winds of volatility will be blowing strongly for a few quarters more Encouraging signs from Saudi Arabia are tempering concerns of even higher crude oil prices due to Russia's output being squeezed by sanctions. OPEC+ largest producer indicated it will step in raising output should Russia's quota drop excessively - yet ProfZero argues that can't be expected happen too fast, given the cartel's clear liking for the current price environment. Call on President Biden to ease the increase ProfZero won't say "I told you" - the big red candle on page 3 does an already excellent job reminding BTC traded in overbought territory for almost 2 sessions. Calling the bottom now? Only on stronger fundamentals PROFONE'S TAKE ProfOne set its eyes on lithium, indicated by IEA as the mineral for which demand was growing the fastest. Lithium price ballooned 68% since the beginning of 2022, and car manufacturers do not anticipate any easing for several years, now that the European Parliament just voted to ban the sale of new cars with combustion engine from 2035. Lithium demand is growing so rapidly that ProfOne understands why Tesla (TSLA) CEO Elon Musk wants to integrate upstream into lithium production. Lithium shares a common issue in the commodity space - 80% of the world’s lithium is mined in just 3 countries, namely Australia, Chile and China. Yet another head-scratching factor amidst talks of de-globalization and tighter supply chains PROFTHREE'S TAKE This week was rich in Purchasing Manager’s Indices (PMIs) print for May in China. Both the official manufacturing PMI and the Caixin gauge beat expectations, ticking up from April lows. Although the figures remain below the 50-point level which separates growth from contraction, the negative trend seems to have come to an end (or a hold) thanks to lifting in COVID-19 restrictions. ProfThree sees optimism over Shanghai reopening to continue, yet warns against being too naive to exclude the probability of another variant coming. With China’s economy reeling and limited headroom for monetary stimulus due to soaring inflation, it is too early to call a rebound. Profs remain cautious about this year’s economic perspectives for the country - and in a certain way for the (ex?) globalized world at large
CME:BTC1!
by ProfZero
Pinduoduo, Inc.(PDD,HOLD)Strong Marketplace Drives 1Q Beat, butFacingNear Term Challenges Maintain HOLD and$50 PT NASDAQ:PDD We are maintaining our HOLD rating and$50 price target after PDD beat 1Q revenue and profit estimates but implies potential revenue deceleration and a step up in expenses due to COVID. Active buyers reached 882M, adding 13Mq/q, improvingfrom+1M in 4Q, with MAUs also growing18M q/q to751M, after decreasing 8M in 4Q. But mgmt. notes that with the current scale, active buyer growth should inevitably slow down. Revenue, excluding 1P sales, increased39% y/y, accelerating10pts from 4Q,driven by 29% y/y growth of online marketing revenue (vs. +19% in 4Q) and 91% growth of transaction services revenue(vs. +108% in 4Q). 1Q Non-GAAP operating margin was 15.5%, lower than the all-time high of 30.8% in 4Q(note that 4Q profit benefited from a one-off rebate from a cloud service provider, which loweredGOGS and R&D expenses), but improved significantly from (-14.3%)in 1Q:21, primarily due to operating leverage from sales and marketing, while R&D increased modestly.The company reiterates plans to invest in agricultural, primarily in R&Dbut indicates it will take time to identify good projects and financial metrics are not KPIs. As usual, the company does not provide guidance for 2Q, but points out COVID lockdowns in cities including Shanghai, which should weigh on 2Q growth and might incur additional costs. Overall, PDD delivered a solid 1Q, with 3P revenue re-accelerating despite COVID disruptions since late March. However, we expect COVIDlockdowns to have a larger impact onPDD in 2Q given peers have more established logistics networks. NASDAQ:PDD
NASDAQ:PDD
by TigerBrokers
Bitcoin Value Forecast 2022Why 2021 Was a Decent Year for Bitcoin More than 2021, Bitcoin partook in a lofty ascent in its fairly estimated worth. Toward the beginning of the year, a solitary coin was esteemed at $32,000, and by April that number had multiplied. Brokers were hopeful that more extensive acknowledgment of bitcoin by dealers and large banks would uphold the cost. In any case, the guarantee beat the truth — it was basically impossible to utilize bitcoin for quite a bit of anything with the exception of speculative, dangerous exchanging. A decrease in the securities exchange in late 2021, and a fall in profoundly esteemed development stocks, conveyed cryptographic forms of money down too. Bitcoin completed 2021 at about $47,300. As digital currency is still generally seen as a dangerous, speculative resource, this "risk-off" exchange brought bitcoin down to beneath $27,000 by early May. This addresses a deficiency of over a portion of the worth Bitcoin came to at its November 2021 pinnacle of $69,000, focusing on no indications of supported recuperation. Worries over the high power utilization related to bitcoin mining and the forbidding of digital currency exchanges by China likewise burdened bitcoin's worth. What Is the Fate of Bitcoin? Whales Make a plunge The future cost of bitcoin relies upon whether advanced monetary forms can act as valuable monetary resources. There was little help for this idea among monetary newsmakers in the early years, however, some once-suspicious significant financial backers have come around. Smorgasbord and Others Now Adherents Warren Buffett, whose Berkshire Hathaway organization has compensated financial backers with colossal returns over many years, when depicted digital money as "rodent poison squared," and he swore he could never contact it. Be that as it may, by buying NuBank, a computerized "neobank" engaged with the crypto space, Smorgasbord has given bitcoin a handed-down demonstration of positive support. Lloyd Blankfein, a previous executive of Goldman Sachs, has declared that he's "developing" on bitcoin and other digital forms of money. Jack Dorsey, an organizer behind Twitter, surrendered his occupation as President of that organization to run Block, an installment handling pioneer that is presently growing new computerized money applications. Reception by these and other corporate pioneers could uphold an inversion in bitcoin's fast drop and bring higher worth toward the finish of 2022.
BITSTAMP:BTCUSDLong
by IPatrice
Gold Remains a Compelling Investment on Price WeaknessGold is hard cash, and the precious yellow metal has a long history dating back thousands of years. Dollars, euros, yen, pounds, yuan, rubles, and all currencies floating around in the global financial system are babies compared to gold, the hard asset that holds value and symbolizes wealth. Gold holds the $1800 level after making a new high The bullish long-term trend remains firmly intact Russia backs the ruble with gold- Will China follow? Buying dips has been golden over the past two decades So many choices for gold investing and trading Countries, central banks, monetary authorities, and supranational institutions hold gold as a critical part of their foreign exchange reserves. They have added to reserves over the past decades, validating gold’s role in the global financial system. Aside from its monetary role, gold is a commodity and an ornamental metal that symbolizes love, wealth, and security. Gold has a myriad of industrial applications. Gold’s brand is unparalleled as it remains the ultimate form and symbol of money. Gold’s bull market began at the turn of this century, and it continues in May 2022. Gold’s appreciation is a commentary on fiat currency depreciation. Over the past two decades, the precious metal has respected technical levels and remains a compelling asset for investors and traders. Gold holds the $1800 level after making a new high On March 8, 2022, June COMEX gold futures rose to a new record peak of $2,082 per ounce. The price rallied on the back of Russia’s invasion of Ukraine but ran out of upside steam after making a marginal new high above the August 2020 peak. The chart of June gold futures shows the correction that took the futures to a low of $1,785 per ounce on May 16. Since then, the price bounced and was just above the $1850 level on May 27. While gold fell below the $1800 level, it only spent two days under the price that was the pivot point throughout most of 2021. The bullish long-term trend remains firmly intact Gold’s bullish trend began over twenty-two years ago, in 1999. The chart shows that the decline to $252.50 per ounce in August 1999 stands as gold’s bottom. Gold fell below the $300 level as the United Kingdom auctioned one-half of its gold reserves from 1999 to 2001. In early 2008, the precious metal rose above the 1980 record $875 high and probed above the $1,000 level for the first time. Gold has not ventured below $1,000 per ounce since October 2009. After reaching a record high of $1,911.60 in 2011, gold corrected and consolidated at above $1,000 through July 2020, when it made a higher high in August. The latest peak came in March 2022 as the long-term bull market trend remains firmly intact. Russia backs the ruble with gold- Will China follow? Central banks and governments hold gold as an integral part of foreign exchange holdings, validating gold’s role in the worldwide financial system. Over the past years, governments have been net buyers of gold, adding to reserves, with China and Russia the most high-profile buyers. Since the Chinese and Russians are significant gold producers and reserves are state secrets, it is challenging to quantify the increases in their reserves. According to the World Gold Council, in 2020, annual gold production was 3,478.1 tons. China produces 368.3 tons, and Russian output was 331.1 tons. Together, they produced over 20% of the world’s output, and the lion’s share likely went into reserves. China and Russia had also purchased gold on the international bullion market to add to their holdings. The geopolitical bifurcation that began on February 4, 2022, with a handshake between Chinese President Xi and Russian President Putin for “no-limits” cooperation, was a prelude to Russia’s invasion of Ukraine. It could also accelerate Chinese plans for reunification with Taiwan. The alliance pits China and Russia against the US and Europe, with other countries lining up on each side of the widening gulf between the nuclear powers. The US remains the world’s leading economy, but China is nipping on the US’s heels for the leadership role. The US dollar is the global reserve currency, but its role is slipping, and the geopolitical bifurcation threatens the dollar’s position. Sanctions led the Russians to declare that 5,000 roubles are exchangeable for one gram of gold, putting the Russian currency back on a gold standard. The chart of the currency relationship between the US dollar and the Russian rouble shows the plunge that took the rouble to $0.00757 in March after the invasion. The move to back the rouble with gold lifted the rouble to over the $0.0148 level on May 27. Meanwhile, the rouble moved to its highest level since 2018 against the US currency in May before correcting. If China follows the Russians and backs the yuan with gold, it will dramatically increase the precious metals’ role in the global financial system. Gold’s price would likely rise with the increasingly prominent role. Buying dips has been golden over the past two decades The long-term gold chart shows that buying gold on any price weakness has been the optimal approach to gold investing over the past two decades. Buying on rallies increased the odds of waiting out corrections and consolidation periods. The chart over the past three years shows that buying gold during periods of price weakness increases the odds of profitable trading and investing. So many choices for gold investing and trading The most direct route for owning gold is purchasing gold bars and coins. Gold is one of the few assets that provide a sense of security and wealth and is beautiful in its pure form. Gold futures are the next step on the golden pyramid as they provide a delivery mechanism. Unleveraged gold ETF products like GLD, IAU, and BAR hold the metal, creating a high correlation with the physical gold price. Gold mining shares provide leverage as the companies invest substantial capital in extracting gold from the earth’s crust. They extract lower grade ores as the prices rise, leading to greater profits in bull markets. Gold mining shares tend to outperform the metal’s price during rallies and underperform during corrections, providing leverage. However, gold mining shares do not suffer from the time decay that other leveraged tools often experience. Individual gold mining shares have idiosyncratic management risks and specific mining projects in producing countries worldwide. The GDX senior gold mining ETF and the GDXJ junior mining ETF products hold portfolios of senior and junior gold mining companies that diversify the idiosyncratic risks. The NUGT and JNUG products turbocharge the upside and downside returns of the GDX and GDXJ products, but they are only appropriate for short-term risk positions as NUGT and JNUG experience time decay. There are many other gold-related investment options, but the pure-play is the metal. Gold is a mainstay investment and trading asset that should be part of all portfolios. At the $1851.30 level on May 27, gold has corrected from the early March low but is on the way back up after probing below $1800 per ounce. Buying gold on dips continues to be the optimal trading and investing approach for the precious metal with a long history. Gold provides security and holds its value over time, and Russia’s return to a gold standard could boost its role in the global financial system over the coming years. -- Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
COMEX:GC1!Long
by Andy_Hecht
1
Alibaba (BABA, BUY) Solid F4Q; Now is the Inflection Point We are upgrading our rating from HOLD to BUY and maintain our PT of $130 as F4Q results beat estimates and we see F1Q (June quarter) as the long-awaited inflection point for the company. CMR was flat y/y in F4Q (vs. -1% in Dec. quarter), despite a low-single-digit decline in GMV due to disruptions in supply chain and logistics in March. Cloud revenue grew 12% y/y, decelerating 8pts from F3Q due to macro weakness and COVID. Global AACs reached 1.31B, adding 30M sequentially, with 1B from China. Mgmt. indicates that June quarter will be more challenging as a result of COVID resurgence and lockdowns. In April, total revenue declined low-single-digit;China retail marketplace GMV declined low-teens due to supply chain and logistics disruptions, with May improving but still not fully recovered. Given the macro uncertainty, BABA is not providing revenue guidance for FY23. Repurchased 17.8M ADSs for $2.0B during the quarter. Despite the more challenging June quarter, we are upgrading BABA to BUY as we believe both revenue and profitability will bottom out and hit a long-awaited inflection point in the quarter. With government's stimulus policies kicking in and an easier comp, BABA's revenue growth and margin should start to improve in the 2H. In addition, BABA is trading at 11x CY23E earnings, significantly lower than the fiveyear-average of 22x. Although the stock's growth thesis has been muted since 2021, we see positive earnings revisions and valuation improvement in the coming quarters. NYSE:BABA
NYSE:BABA
by TigerBrokers
Chinese yuan rebounds on Shanghai reopening hopesThe Chinese yuan rose to one-week highs on Monday, fueled by expectations that Shanghai, the country’s financial hub, will soon emerge from a two-month lockdown that has crippled economic activities in the city and weighed on the country’s overall economic recovery. The CNY traded at 0.1504 against the greenback on Monday, recovering further from an over one-week low of 0.1481 on Wednesday when the yuan weakened against a basket of 24 currencies tracked by the China Foreign Exchange Trade System (CFETS). Still, the yuan has fallen below the 0.1570-mark against the USD since April as concerns over China’s economic recovery grew following Shanghai’s prolonged lockdown that has affected consumption, industrial production, lending, foreign trade, and other aspects of the economy. The RSI indicator is at least suggesting that this recovery in the yuan may not last. Slowing economy China’s zero COVID-19 policy has definitely taken a toll on the domestic economy. In April, China’s retail sales fell at the sharpest pace in over two years as the lockdowns in Shanghai hammered consumption and the supply of retail goods. There have been reports of food shortage in Shanghai, with state-run Xinhua News reporting that multiple botanists called on residents to stop digging and consuming wild vegetables. Industrial output, meanwhile, unexpectedly fell in April versus a year earlier, reversing the modest gain in March. The drop in China’s factory output last month was the steepest since the height of the COVID-19 pandemic in February 2020. It came as lockdowns forced the closure of vital factories including those operated by local and domestic carmakers. Shanghai is one of China’s major auto production hubs and the lockdowns weighed on carmakers’ revenues in April. All-out effort to stimulate economy As investment banks and economists downgraded their outlook on the Chinese economy this year due to the lockdown’s impact, Beijing has vowed to all-out efforts to stabilize industrial and supply chains and boost infrastructure construction. On Friday, Chinese Premier Li Keqiang acknowledged that the country’s latest economic challenges are worse than those seen in 2020. Li said the government is "at a critical juncture in determining the economic trend of the whole year.” He urged local governments to make every effort in bringing the economy back to its normal track. Shanghai reopening The Shanghai government is working to ease the city’s lockdown, issuing on Sunday an action plan that consists of 50 policies and measures to help stimulate the economy. The measures include relaxing the rules on resuming production starting June 1 and expanding the scope of subsidies for companies’ pandemic prevention and disinfection, state-run Xinhua News reported Sunday.
by BlackBull_Markets
SSE COMPOSITE close to a bullish reversalThe Shanghai Stock Exchange (SSE COMPOSITE) broke and closed today above the 1D MA50 (blue trend-line) for the first time since January 12. This alone is a first major step towards restoring the long-term bullish sentiment. There are two more barriers ahead, the Lower Highs trend-line from December 13 2021 and then the 1D MA200 (orange trend-line). In our opinion, the index can methodically hit each target if a 1D candle closes above the previous barrier. For example now that we got the 1D close above the 1D MA50, a buyer can target the Lower Highs trend-line. If we close above the trend-line, then target the 1D MA200. Complete long-term reversal to the bullish trend should come only above the 3500 Resistance. Notice that the RSI on the 1W time-frame has broken above its own MA trend-line and achieved Higher Highs, which is a strong step towards the direction described above. -------------------------------------------------------------------------------------------------------- Please like, subscribe and share your ideas and charts with the community! --------------------------------------------------------------------------------------------------------
SSE:000001Long
by TradingShot
2
Dining out soon?China, one of the largest consumer of soybean oil, has tapered its demand for the edible oil due to COVID-related control measures over the past few months. With new cases falling and lockdown for Shanghai expected to be lifted soon, we see positive demand drivers on the horizon for soybean oil. Restaurants are among the largest consumers of the oil. As consumers resume their normal consumption patterns and dining out becomes the norm again, it’s easy to see the impact on demand. Looking at the charts, we see a falling wedge pattern since April (where prices make lower highs and lower lows) which generally indicates an upside breakout could be near. On a longer timeframe, we are close to the 6-month uptrend line, where prices have bounced off in the past. Additionally the $78 resistance level provides us with further confidence that prices are likely to remain supported at the current levels before making a jump higher. As demand from the world’s largest consumer of soybean oil revives and technical levels remain intact, we expect more upside from here! Staggered entry at 79.25 and 78.25 with stops below 77.25 and targets at 84 and 87.60. Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
CBOT:ZL1!Long
by inspirante
1
China ETF GXC to launchAs previously described, yes, the GXC ETF appears to have found its footing to launch. The weekly chart has clocked a higher low, and this week's candlestick is a nice bullish one with a long-ish trailing tail at the bottom, which is a bullish indication. The daily chart shows the week closing at a gap resistance, and above the MA band. Technical indicators are also bullish. Appears ripe for a bullish relaunch! ============================== On a side note, and non-chart related, I just liek to mention something now, that should help in chart reading for anyone. You see, many have told me about China, its severe lockdown, its impact on the economy, and such. I get all that, and I do agree to some extent. These fundamental and geopolitical aspects do form a part of my analyses as well; or at least I look for alignment. This is after all, part of critical analysis over technical analysis... the art in the science. Another aspect I would also like to point out is that biases can be very entrenched and catch us unaware. Even to me it happens, despite being aware about it. You see, I opine that China knows something about the CoV2, and their economy. 5000 years of histroy did not go to waste. IF at all, China learns much more from their rich history than any other IMHO. Bearing this in mind, I find myself asking what is it that they know that I do not yet know. While not getting the answers with clarity, it allows me to think out of the box. And particularly, deviate from Western media and thinking that China this and China that... I do not disagree with their assessment, or reporting, but I find that a large degree of biases are infused in the analytics. Hence I form my own, and dare to deviate where required. Again, adjustments are made, when and where necessary. So... do think about these points when we assess another country or economy, or commodity for that matter. In the longer foreseeable future, I really see China doing better than most of the (western) world. (possibly add Russia into that, but it is way too early and another story for another time) Stay safe and well!
AMEX:GXCLong
by Auguraltrader
1