The market rally remains strong with indexes in relatively high or even record territories. There was some “orderly” correction today – was kind of expected. We would repeat the same suggestion we made in our weekend edition – it is still the time to be fully invested if you can but be ready to rotate in to new sectors. Also, remember to take some profit before the paper profit evaporates rather than wait for a bigger profit that never arrives. The market will always do what it wishes to do.
Chinese stocks mostly traded high today, spurred by stimulus talk or monetary policy intentions announced by the government in China. This is about the third time Chinse stock have moved up driven by policy announcement by the Chinese government this year. Each of the two previous times the stocks crashed back within days. We hope things are a little different this time around. PDD Holdings has been beaten down both by Chinese economic condition and threat from the US government to ban. There is also the political consideration of threat by the US government to ban or impose trade restrictions on Chinese company or products. One must invest in Chinese stocks with great caution these days. PDD Holdings is quite down but you generally you have to buy low to sell high. Buy PDD low but keep your two eye open. The stock’s technical profile must be combined with the fundamentals including political trade bit-bats in order to manage and possibly minimize the risks.
Four stocks – Chinese ADRs at the US markets, worth considering are: FUTU Holdings. (FUTU), Trip.com Group (TCOM); PDD Holdings (PDD) and ALBABA Group Holding (BABA). We normally stay clear of stocks worth less than $20.00.
