Is it too late to pick up some stocks made in China? Not if you look at it this way? (March 16, 2022)
FXI BIDU BABA FXI GLD
I am going to take a quick look at some of these Chinese stocks. They had big monster rallies today, this is a weekly chart. If you look at the daily chart you can see the FXI ( NYSEARCA: FXI ) was basically going straight to hell in a hurry. It had just been declining a bit and then it looked like maybe it’s going to form some kind of a base here, though everything was still drifting lower. And then, wham, this thing really started to get crushed.
I don’t know if that is because of the big COVID outbreak or what. But we got to a point yesterday where there was a gap down and then a higher close, which is the first time that it has happened in a while, It has happened, here’s one, actually this was a gap up and a higher close. This was kind of a rare thing in this kind of market and so you want to be ready for this kind of move.
The thing is, if you just look at the daily chart, in my view, you are going to kind of miss the action, and here’s why, because on the weekly chart this looks entirely different. So that is, in my view, what you want to look at are these weekly charts. We will look at a couple more of these.
When you look at the weekly charts ( NASDAQ: BIDU ) you don’t get the sense that these have gone up “too much”. You look at the daily charts ( NASDAQ: BIDU ), ( NYSE: BABA ), this is a pretty big move that you almost want to sell into and maybe that is the way to go. But when I look at the weekly chart ( NYSEARCA: FXI ) it looks to me like this is a capitulation low, that’s really what I am looking at.
You get all of these lows where you get all of these sell-offs and then there is a little rally and then they sell again. And then there is a little rally and they sell again. Because they are little sell-offs they are not these big whooshes that bring bottoms. Well, this was kind of the big whoosh into this week, basically, up until today it was just lower and lower and lower, and this stuff isn’t going to zero. So at some point, you are going to get some kind of catalyst, it’s typically a news catalyst on something like this.
But every once in a while, it’s just purely technical; you will get some kind of a catalyst that comes out and causes the shorts to say, oh s-h-i-t, I think I held my s-h-o-r-t a little bit too long. And then they start covering and then at the same time you’ve got the disaster buyers who are going, okay finally I got confirmation that things can’t get any worse. And when they can’t get any worse it means they are probably going to get better, buy them.
You will see the same thing with BABA ( NYSE: BABA ) and Baidu ( NASDAQ: BIDU ). Things got really, really overheated on the downside. So anyway, these are just the stocks that I want you to check out and stuff that we covered today in Stock Market Mentor.
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