Red Dragon Awakening?
The Chinese internet names have received a lot of chatter recently. Most of it is bullish, which one can put me in that camp, and that makes me somewhat nervous. But PRICE action must be respected and the KWEB may be undergoing some green shoots even though it still trades 51% off highs made back near the very round par number this February, without the courtesy of a 2:1 split (a cheap stab at humor). Since the lows of the week ending 8/20, it has advanced 6 of the last 12 weeks, with 4 of the 6 gainers up at least 8%. The tug of war between the bulls and bears remains fierce with sideways trade at the highs of that range in the mid-50s, but higher lows creating a bullish ascending triangle. Not much to be done until the KWEB can break above 55, but looking under the hood of the fund one would be the ADRs of BABA and JD are within the top holdings. The latter name on the WEEKLY chart shows a very important level at the round 80 number (did former resistance there become support with last week’s firm CLOSE?). NTES climbed above its 200 day SMA last Thursday for the first time in almost 4 months. TCOM has a very clean ascending triangle as well at the 33 area and will have to deal with 200 day SMA resistance just above. Will be an interesting year-end for the ETF.