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China50

The Dragon Bouncing BackSwift dismantling of zero-Covid policy in China has triggered a surge in demand resulting in robust economic recovery. Is this a flash in the pan or a structural shift? Bouncing off from 2022 bottom in early November, Chinese equities (represented by FTSE China 50 Index, "China50 Index") rallied 64% on COVID easing. The rally has stalled based on specific sector weaknesses causing a 12% correction in February. This paper argues that record revenues (over CNY holidays in January), anticipated pro-growth Government stimulus, record-levels of consumer savings, and loose monetary policy will collectively drive Chinese equities higher. A long position in CME’s E-Mini FTSE China 50 Index futures will deliver a reward-to-risk ratio of 2.35x while riding this economic shift. SECOND LEG OF RE-OPENING TO LEAD TO RECOVERY Five reasons support our bullish stance on Chinese equities: First, favourable technical signals. Stalled rally plus weak sentiments have caused the markets to retrace 12%, leaving it right below a key Fibonacci retracement level. This suggests that the FTSE China 50 Index could continue its upward trajectory in 2023 as reopening turns into recovery. Second, pro-growth fiscal policies. Investors hold high anticipation of upcoming National People's Congress (NPC) scheduled for early March. During the “Two Sessions,” the government is expected to make pro-growth policy announcements to boost the economy. Historical analysis shows that the Two Sessions (NPC plus top political advisory body meeting) tend to provide solid tail winds to the stock market. Shares have previously rallied ahead of the meetings and afterwards as investors digest the news. Over the last decade, real estate & healthcare shares delivered the largest excess returns following these meetings. Third, accommodative monetary policies. Meanwhile, PBOC added liquidity into the financial system to meet a rapid rebound in loan demand. PBOC kept short-term & long-term Loan Prime Rate (LPR) unchanged for the sixth straight month. Short-term LPR was at 3.65%. Long-term LPR (used to calculate mortgage rates) was at 4.3%. Both are at their lowest level in 20 years as China tries to balance economic growth and currency stability. Fourth, revenge spending. Forced to stay home due to Covid restrictions & unable to spend, Chinese consumers saved one-third of their income last year, depositing RMB 17.8 trillion (USD 2.6 trillion) into banks. Even for a thrifty nation like China, that's massive. With restrictions gone, will Chinese consumers revenge to spend their excess savings? Finally, valuations of Chinese shares are seemingly still in bulls’ favour despite the reopening rally. The MSCI China Index is trading at 10.9x forward P/E, below the 10-year average of 11.2x. In tandem with equity market price retracement, China centric commodities such as Iron Ore and Copper have also stalled. But are looking to rise again. ECONOMIC DATA PAINTS A HOPEFUL FUTURE AHEAD Economic data from China show positive signs of economic recovery in 2023. Purchasing Manager Index (PMI), an important leading indicator of business activity, rebounded sharply in January. GOVERNMENT PRIORITIZING ECONOMIC GROWTH The Chinese government has announced stimulus packages to support its struggling Real Estate and Tech Sectors. For instance, Guangzhou recently committed $29 billion to local tech funds to inject capital into high-tech sectors. The government also announced a 21-point plan in January to boost property developer’s balance sheets with $67 billion in aid. Moving in tandem with pro-growth Government accommodative fiscal policy, the PBOC continues its commitment to accommodative monetary policy by keeping key short- and long-term Loan Prime Rate (LPR) at their lowest level in almost two decades to boost growth. However, this monetary stimulus comes at the cost of rising inflation in the country. PROFESSIONAL INVESTORS ARE BULLISH CHINA AGAIN In a note recently published by Goldman Sachs, the bank expects Chinese stocks to surge as much as 24% by the end of this year as the economy shifts from reopening to recovery. The bank highlighted that "professional speculators" on their prime brokerage platform are showing a greater appetite for Chinese stocks. Goldman highlighted that hedge funds had substantially re-risked their exposure in offshore Chinese equities with net Chinese exposure to total equity exposure reverting to all-time highs. FOREIGN INVESTORS ARE BULLISH CHINA TOO HKEX's Stock Connect program’s north bound flows shows that foreign investors heavily bought into Chinese equities in January and continue to so do in February despite retracement. The Shanghai Northbound Stock Connect, which allows HK investors to access Chinese equities listed on Shanghai Stock Exchange (SSE) saw net buying of RMB 83.4B so far in 2023. The Shenzhen Northbound Stock Connect shows net purchases of RMB 74.1B this year. In comparison, these investors bought RMB 9.6B of Shanghai & RMB 25.4B Shenzhen shares in December. Besides the connect program, foreign investment into China scaled up in January to the highest level since June 2022. Foreign investors bought RMB 128 billion ($18.7 billion) according to China’s Ministry of Commerce. That was 14.5% higher YoY and a 75% jump in investment into high-tech manufacturing. This spike reversed two months of double-digit drops in late 2022. DEMYSTIFYING THE CHINA 50 INDEX The FTSE China 50 Index comprises of the 50 largest and most liquid Chinese stocks that are listed and traded in Hong Kong. The index is specifically designed for international investors to get exposure to Chinese equities. The China 50 index is dominated by large tech stocks representing 23.4% of the index. Bank stocks have a 18% weightage with retailer shares weighing in at 15%. The overall index provides a balanced with a mildly skewed tech exposure to Chinese equities. TRADE SET UP With a raft of Government and PBOC policies supporting Chinese economic recovery amplified by optimistic investor sentiments, this paper proposes a long position in CME’s E-Mini FTSE China 50 Index futures expiring in June 2023 to harvest a 2.35x reward to risk ratio. Each futures contract offers exposure to $2 x China 50 Index. Entry: 12,990 Target: 15,800 Stop: 11,800 Profit at Target: $5,620 Loss at Stop: $2,380 Reward-to-Risk Ratio: 2.35x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
FLong
by mintdotfinance
5
Buying CN50 at current swing low.CHN50 - 24h expiry - We look to Buy at 13261 (stop at 13101) Although the bears are in control, the stalling negative momentum indicates a turnaround is possible. This is positive for short term sentiment and we look to set longs at good risk/reward levels for a further correction higher. Trading within a Bearish Channel formation. Our expectation now is for this swing lower to continue towards the bottom of the trend channel, to complete a correction before buyers return. Although the anticipated move higher is corrective, it does offer ample risk/reward today. Our profit targets will be 13661 and 13741 Resistance: 13570 / 14235 / 15080 Support: 13110 / 12645 / 12070 Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
VANTAGE:CHINA50Long
by VantageMarkets
BABA Alibaba Options Ahead of EarningsIf you haven`t sold BABA when Charlie Munger did: or reentered when it was cheaper than the IPO: Now looking at the BABA Alibaba options chain ahead of earnings , I would buy the $110 strike price Calls with 2023-8-18 expiration date for about $10.20 premium. If the options turn out to be profitable Before the earnings release, I would sell at least 50%. I have chosen that expiration date to allow me to be wrong and not close the position and to have a bigger gain by the expiration date, if BABA Alibaba keeps on climbing. Looking forward to read your opinion about it.
NYSE:BABALong
by TopgOptions
6
China: Back to the Grind (SHORT)China: Morgan Stanley scenario: Chinese stock indexes could plunge by another 20% from current levels over the next six to 12 months — and potentially remain lower for much longer if the hypothetical stress scenario persists. China’s GDP could slow drastically, averaging 2% growth in 2023. More than 11 million people could lose their jobs, likely sending the urban unemployment rate above 7%. Construction, accommodation and catering would see the most job cuts.
SSE:000062Short
by SWFguy
Buying CN50 at trend of higher lows.CHN50 - 24h expiry - We look to Buy at 13540 (stop at 13470) Although the bears are in control, the stalling negative momentum indicates a turnaround is possible. The trend of higher lows is located at 13455. This is positive for short term sentiment and we look to set longs at good risk/reward levels for a further correction higher. The hourly chart technicals suggests further downside before the uptrend returns. We look to buy dips. Our profit targets will be 13740 and 14235 Resistance: 14235 / 15080 / 16150 Support: 13110 / 12645 / 12070 Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
VANTAGE:CHINA50Long
by VantageMarkets
MARKETS: DebtCeiling 2013& What FollowsHi Traders, Investors and Speculators of the Charts 📈📉 I am passionate about economics and history. Together, these two can tell a compelling story of ow interlinked everything is, and give a glimpse into the future should certain events repeat itself. That is the core of my argument today as we look at the previous time he US Government hit a debt ceiling, and what happened after. It would be great if you could watch the video , but if you can't spare 10min here's the summary: 📈 VTI : Vanguard Total Stock Market ETF I love using the VTI as a general overview of the trend on stocks. You could also use the S&P, it's just a personal preference considering they have interest and hold 50% plus shares of nearly EVERYTHING. The VTI mostly consolidates and sees some downward price action for three years after USA announces debt crisis. VTI recovers in Jan 2016, three years later. In other words, in the stock market you may see some down, some up. A near equal amount of buyers and sellers to balance out the total environment. China50 seems to be a precursor of what is about to happen on VTI. 📉 Look for buy opportunities during this time, prepare to hold long term. 📈 GOLD Gold starts declining before the debt crisis is officially announced. A multiyear bear market follows, one of the worst. Continues up until 2016. 📉 Seems like a good idea to take note of the above and get out of gold, enter again during new lows 📈 BTCUSD / Crypto We didn't have an overwhelming amount of alts during that time, so only the Bitcoin USD chart can give an idea of what may happen to crypto after a debt ceiling is announced. Interesting to note that BTC rallies almost parabolically and reaches it's first ATH. Then, at the same time the debt crisis is announced. Bitcoin continues into a multi year bear market, only to recover in Jan 2016. 📉 Do I really need to share my unpopular opinion here ... It all depends on how much you believe in history repeating itself. 📈 USOIL / OIL Industry The oil industry sees the second worst bear market yet, only recovers in Jan 2016 but does not make a higher high until 2020. 📉 Oil saw a sharp v Shape recovery after the announcement of Covid. Oil is still in higher demand than usual considering scarcities so I believe there is another push upwards towards the 3.618 Fibonacci Extension, also the next immediate resistance zone around 200. 📈 EURUSD / strength of the Euro The announcement of the 2013 debt ceiling sends the Euro into a bear trend against the dollar, bottoming out at 0.76 three years later, again only in 2016. 📉 Euro recently saw a strong V Shaped recovery, but considering the next point you may want to rethink holding Euros: 📈 DXY / Dollar Strength Index In comparison by percentage, the DXY surpasses every other market. The DXY increases nearly parabolically over this period of time all the way until November 2016. Which naturally ames sense because when there is talks of an economic crises, people tend to sell their assets for CASH which would explain why markets dropped but DXY increases due to higher demand. 📉 Dollars gain against all in Forex markets. Here's more info on the debt ceiling and what happens if a country defaults: What are your thoughts on this? _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck
AMEX:VTIShort
by CryptoCheck-
14
A50 ready to test 15k To celebrate the new year, here some TA on the China A50 index: The breakout of the descending triangle led to a powerful rally that is still in full place and will most likely bring us to 15k. The golden cross (50 SMA crossing 200 SMA from below) could be the fuel to propel us there. 15k represents a major resistance, if broken on the first attempt (unlikely), it will bring us to Valhalla. Most likely we will get a retracement and form a nice shoulder for an inverse head&shoulders formation (bullish pattern). From there we will start to raise and visit the moon once the neck (likely 15k) is broken.
SGX:CN1!Long
by RF_Trading
Selling CHINA50 into trend of higher highs.CHN50 - 22h expiry - We look to Sell at 13310 (stop at 13445) Buying pressure from 12917 resulted in prices rejecting the dip. The current move higher is expected to continue. Previous resistance located at 13304. This is negative for short term sentiment and we look to set shorts at good risk/reward levels for a further correction lower. Preferred trade is to sell into rallies. Although the anticipated move lower is corrective, it does offer ample risk/reward today. Our profit targets will be 12920 and 12660 Resistance: 13140 / 13615 / 14200 Support: 12660 / 12075 / 11120 Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
VANTAGE:CHINA50Short
by VantageMarkets
ChinaA50 - Bias for higher levels.CHN50 - Intraday - We look to Buy at 12540 (stop at 12380) Selling pressure from 13067 resulted in all the initial daily gains being overturned. The current move lower is expected to continue. The bias is still for higher levels and we look for any dips to be limited. We, therefore, prefer to fade into the dip with a tight stop in anticipation of a move back higher. Our profit targets will be 13005 and 13140 Resistance: 13140 / 13615 / 14200 Support: 12660 / 12075 / 11120 Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
VANTAGE:CHINA50Long
by VantageMarkets
2
Chinese SSE300 Index ETF: Bearish Dragon with 1.618 TargetThis is an extension to the Bearish SSE50 setup that I posted not so long ago; I found a tradable US Listed ETF that tracks the movement of the SSE300 and the situation on this chart is pretty much the same as the one for the SSE50 where we are breaking a logarithmic trendline, the moving averages, and looking to make a minimum 61.8% retrace. However, I believe it will go much deeper and my targets will be the 88.6% retrace at $17.31 and then the 1.618 Fibonacci Extension below at $7.72
AMEX:ASHRShort
by RizeSenpai
1
LU Lufax Most Undervalued Chinese StockFor the China reopening thesis i think LU Lufax Holding is the one of the most undervalued stocks you can own right now! And i will tell you why! LU Lufax Holding has a ridiculous PE Ratio (TTM) of only 1.81! The Forward Dividend & Yield is 0.51 (21.79%)! Last year the stock was $18.30. It has lost most than 90% of its value, while the business is growing and pays dividends. The yield alone is a big gain, even if the price stays flat. Last year Morgan Stanley had a price target for LU of $13 while JPMorgan Chase of $15. 3rd biggest shareholder is BlackRock, with an estimated average of $6.11. You can but the stock now 3 times cheaper than BlackRock. The average daily volume in the past 3 months is high, more than $10Mil daily (i think someone is accumulating). My price target is the $7.10 resistance. I believe LU is a premium call. Looking forward to read your opinion about it!
NYSE:LULong
by TopgOptions
3
Selling CN50 into rallies.CHN50 - 21h expiry - We look to Sell at 12765 (stop at 13010) Buying pressure from 12189 resulted in prices rejecting the dip. The current move higher is expected to continue. Trading within a Bullish Channel formation. Our expectation now is for this swing higher to continue towards the top of the trend channel, to complete a correction before sellers return. We therefore, prefer to fade into the rally with a tight stop in anticipation of a move back lower. Although the anticipated move lower is corrective, it does offer ample risk/reward today. Our profit targets will be 12065 and 11120 Resistance: 12660 / 13140 / 13610 Support: 12075 / 11120 / 10490 Risk Disclaimer The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.
OANDA:CN50USDShort
by OANDA
Selling CN50 previous support.CHN50 - 21h expiry - We look to Sell at 12340 (stop at 12570) Although the bears are in control, the stalling negative momentum indicates a turnaround is possible. A higher correction is expected. The bias is still for lower levels and we look for any gains to be limited. We therefore, prefer to fade into the rally with a tight stop in anticipation of a move back lower. Our profit targets will be 11685 and 11485 Resistance: 12270 / 12950 / 13370 Support: 11485 / 11000 / 10490 Risk Disclaimer The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.
OANDA:CN50USDShort
by OANDA
Jamie Gun2Head Trade - Selling China50 Trade Idea: Selling China50 Reasoning: Reaction from major support level . Interim support at 1713 in front of FED meeting later today. Entry Level: 13943 Take Profit Level: 13630 Stop Loss: 14078 Risk/Reward: 2.32:1 Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
FOREXCOM:CHINA50Short
by Signal_Centre