12/6 Daily Market Note: Foreign Investors grow more confident that short-selling China will work handsomely. Will they be right?
12/6 Premium Strategy Note - The Hang and the Seng
Hey Folks –
Hope everyone is doing well. A short note today as I have to attend a Substack Boston Meetup later this afternoon. Much of my macro thinking was covered in pre-market Whatsapp today (attached below) so friends can refer to it there. Onto Strategy.
About a week ago, we discussed BYD (HK-1211 or BYDDY) forming recovery structure as it neared a nadir (low point) and I shared a view to members that this name would likely lead in any Hang Seng recovery. Given how challenging China is as a sector, I will continue to do my best in finding such opportunities. Finding Green in a sea of Red in China is no easy task – but worthwhile as it makes trading the U.S. market much easier once volatility returns. I value our Community Members a lot, if you appreciate my research, we would love to have you join us.
HK-9988 (U.S. BABA) continues to languish, but a low-of-range technical structure combined with depressed valuation levels should limit any significant downside.
I am slowly re-entering HK-Listed shares and have a broader opinion that the China internet sector is primed for some relief in the coming weeks. A relief does not mean a structural recovery unless macro conditions change, but risk/reward is at the margin favorable here.
Here is what I have done last night.