These Are 4 Challenges For China Tech To Achieve $441 Billion Rebound
These Are 4 Challenges For China Tech To Achieve $441
Billion Rebound: The chart pattern clearly indicates that the revival for
China's technology stocks is continuing with major technical tests underway.
The Hang Seng Tech Index has risen a full 39% from
mid-March to Friday, on condition that Beijing is lifting the curtain from a
regulatory clampdown on the sector. These 30-member gauges added $441 billion
to market value. The index fell 4.4% on Monday amid a global sell-off after US
consumer prices hit a 40-year high.
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There is speculation that the worst of China's Kovid
lockdown has passed, although there is still a risk of virus flare-ups and
frequent closures. Another challenge is the damage to broader risk sentiment
from widespread inflationary pressures rippling through the global economy.
According to Wang Shenshen, senior strategist at
Mizuho Securities, while China's economy "is likely to slide down between
April and June, it is not yet clear whether companies are willing to spend huge
money on advertising, which is the case for many tech stocks." an important
factor." "Markets will need to see clear signs of solid growth in
tech companies for their shares to rise."
These 4 charts summarize some of the technical challenges facing Chinese tech stocks:
Hang Seng Tech
The Hang Seng Tech Index, which also includes firms such
as Alibaba Group Holding Ltd and Tencent Holdings Ltd, has broken above a
bearish zone in the Ichimoku Cloud analysis, a popular technical study. The
gauge and the so called lagging span that shows the closing levels plotted 26
days ago has broken above the zone. Proponents of the study argue that this
pattern has to hold for the index's outlook to be further strengthened.
US-Listed Shares
The Nasdaq Golden Dragon China Index rose more than 6%
last week to close just above its previous 20-week average, as it began to
decline in February of last year. Staying above the average, and pushing to
8,300 to 8,700, is a threshold technician seen to cement nascent optimism about
prospects for the 81-member gauge of US-traded Chinese stocks.
China Internet ETF
The $7.6 billion KraneShares CSI China Internet ETF
(ticker KWEB) has seen a nearly 49% jump since mid-March. The rally is now
facing a deadlock in the $33 to $34 price area. This area is an area that
includes the so-called inverted head and shoulders measured target and a key
Fibonacci level.
History Test
The broader Hang Seng Index has been lifted through a
technical revival but is also facing a test. Earlier this year it had even
dropped below the trendline starting from the bottom of the 1998 Asian
financial crisis. The trendline, which previously acted as a reliable support,
is today a major resistance that the gauge needs to overcome.
Related Tags: Hong Kong, Stock, Hang Seng Index, China
