They’ll be a 2nd chance to buy Chinese equities

May 3, 2024 Leave a comment

In the short-term, I think the rally in Chinese equity indices is one to ‘rent’, rather than ‘own’.

And I see particular nuances across the 15% – 20% advance seen in the CSI 300 and the #China A50 to the 30% rise in the HSCEI.

It’s been a constructive effort building a new base, however the current trends are not (yet) all exhibiting strength.

I’m anticipating a near-term moment to scalp some returns. Later, I expect an opportunity to accumulate at lower levels.

In this week’s edition of Macro Extremes, the HSCEI will appear in an Overbought ‘extreme’ category.

Inversely, the study below shows the moments when the CSI 300 (in Macro Extremes) was Oversold.

May 3, 2024

by Rob Zdravevski

rob@karriasset.com.au

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Form a view, reporting it doesn’t help

February 25, 2024 Leave a comment

The Shanghai Composite and CSI 300 Index have risen 10% over the past 2 or 3 weeks.

Media reports simply reporting this adds little value.

https://www.bloomberg.com/news/articles/2024-02-24/enjoy-the-rally-while-it-lasts-is-china-stock-traders-new-mantra?sref=qLOW1ygh

My subjective observation of recent pessimism along with my empirical analysis lead to my weekend publication, “Macro Extremes” listing these indices in the ‘extreme oversold’ category in the few weeks prior to this ‘reported’ news.

While this rebound is encouraging, it should be treated as a ‘trade’ for now. This means I expect a small pullback. Some ‘sideways’ travel and consolidation would also be constructive for China’s equity indices.

A couple weeks ago, I highlighted 7 moments (in a private note) when the CSI 300 provided an entry point which pointed to reasonably probability of a trading bounce.

Today’s situation is also labelled as one of those.

February 25, 2024

by Rob Zdravevski

rob@karriasset.com.au

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Filed under Finance & Investment Tagged with , , ,