This China Stock could be next to breakout. $FUTU – March 17, 2025
This is Scott at Scott Trades on Twitter with StockMarketMentor.com and your Chart of the Day. We’re going to take a look at a Chinese Internet stock, but before we do, I’d like to frame things up by looking at a basket of Chinese Internet stocks, via KWEB ( NYSEARCA: KWEB ).
As you can see, for the past couple of years this has been a really tough trade. It’s been choppy and sloppy and going sideways. Just today we had KWEB ( NYSEARCA: KWEB ) hit the highest level of 2025 coming back to near its October peak back in 2024. This is definitely trying to change this trend.
This is interesting because as I zoom out here, you can see that this is how China trades. China will have multiple years of sideways chop and slop, and then it’ll break that trend to the upside and start going strong. Then it’ll give a lot of that move back, chop around, and make another advance.
We know what happened, and we know why this fell as hard as it did. But I’m thinking if this KWEB ( NYSEARCA: KWEB ) trade can, in fact, change this trend and start to push above some of these 2024 highs, we may actually be on the brink of another Chinese Internet stock boom.
If you look at Alibaba ( NYSE: BABA ) today, it had a monster day off this 8-day exponential period moving average. That move came on almost higher than average volume. The stock I really want to show you is Futu ( NASDAQ: FUTU ). Now, Futu ( NASDAQ: FUTU ) is not as extended as some of the others.
If you look at BABA ( NYSE: BABA ), it’s well above the 8-day. If you look at JD ( NASDAQ: JD ), it’s well above the 8-day, well above the 50-day, etcetera. You can see Futu ( NASDAQ: FUTU ) is actually in an interesting pattern. We have some lower highs, and we have some higher lows. It’s pinching a bit here, and I want to see if Futu ( NASDAQ: FUTU ) can break out of this pattern, pushing above 121.00 and closing above, and doing it on volume.
I think Futu ( NASDAQ: FUTU ) could be actionable here for a trade if it can get above that 121.00 level and do it on volume. Now, here’s the thing with Chinese Internet stocks. Just as a disclaimer, I recommend to anyone trading China stocks, that you want to rent China stocks, you don’t want to own China stocks.
You want to trade them, you want to ride the momentum while you can. And then you want to get out of them, cash out, and look for the setup to set up again. That’s just because if you look at stocks like EDU ( NYSE: EDU ), this stock has had a major fall off of its high from 2021, and it still hasn’t recovered.
A lot of these Chinese Internet stocks haven’t recovered. But the last thing you want to do is be an investor and have your stock pull back the amount that this did. And so I always caution anyone with Chinese Internet stocks to trade them, don’t own them. Trade the trend, ride the trend, but if the trend breaks, get out of the way.
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