Thursday, December 23, 2021

JD.com drop 9pct - time to accumulate ?

Tencent Holdings “send Christmas gifts” to shareholders as it announced it will distribute the JD Group’s class A ordinary shares to share holders in kind as a interim dividend. JD.com shares fell 9 pct. This is Tencent strategy to distribute dividend via JD.com shares, it does not mean that JD.com fundamentals have worsened. This distribution will bring selling pressure in the short term but it could also help expand its shareholder base thru Tencents core long term investors. After the move Walmart will be JD.com largest shareholder. 


Amongst the China internet stocks that have been plummeting this year , I actually like Jd.com. The overall crackdown on monopolistic practices by tech companies have made JD.com benefit, as the recent Single Day Sales saw JD.com dwarfed Alibaba's sales growth this year, with JD.com Singles' Day total GMV sales growth on its platform jumping 33% in 2021 compared to Alibaba’s 14%.


Even though Alibaba grew 14% sales growth of Singles Day, the growth is considered a significant slowdown compared to its 93% sales growth in the prior year.


Another driving catalyst of JD.com’s future long-term growth is the emergence of “digital yuan”. Currently there are about 300 million “unbanked” adults in China, with the digital yuan these group of people would be integrated into the digital economy. Given that an average Chinese consumer spends about US$3,000 a year on e-commerce platforms and if this people starts to spending even half of it (US$1,500), this would about US$450 billion worth of e-commerce consumption.


Accumulate JD.com  for the rebound between 236 to 247 .

All posts and charts are for educational and illustration purposes only
Monday, December 20, 2021

Russell 2000 - Is Another 2020 Covid Pandemic Style Crash Coming? The Current Price Action Is Looking Similar to The Price Action Before the Crash Happened in March 2020.

Before the last market pandemic crash in March 2020, the Russell 2000 index had been consolidating for about a year from Feb 2019 to Feb 2020 before taking the plunge in March 2020. The index suffered a 42% decline within a month’s period.


The current price action pattern seems to bear some resemblance to that of 2019, the Russell 2000 has been consolidating within the 2121 to 2173 range since February 2021, made an attempt to break out of the range in November 21 but failed and this price action is eerily similar to the pattern prior to the 2010 pandemic crash.

Recently, I have posted another bearish price action on index exhibiting a weak divergence from the Dow Jones Index.

For those with high risk tolerance, I liked the Direxion Daily Small Cap Bear 3x (TZA) – Leveraged Inverse ETF, the chart seems to be poised for a macro technical breakout. I have also been sharing this trading idea with my inner core group.

Direxion Daily Small Cap Bear 3x (TZA) – Leveraged Inverse ETF
Seek daily investment results, before fees and expenses, 300% of the inverse (or opposite), of the performance of the Russell 2000 Index.
As for those wanting to take unleveraged inverse position on Russell 2000. You could look at the RWM ETF.

Proshares Short Russell 2,000 -1x (RWM) – Unleveraged Inverse ETF
ProShares Short Russell2000 seeks daily investment results, before fees and expenses, that correspond to the inverse (-1x) of the daily performance of the Russell 2000 Index.

Chart pattern and prices action tends to repeat itself and if you believe there will be impending crash coming in the Russell 2000 index, you may look into inverse Russell 2000 ETFs that enables you to profit from the potential downside.

(Disclaimer: the above is subject to errors and omissions, please refer to actual announcement for accurate details. The above is for informational purposes and does not constitute an offer to sell or a solicitation of an offer to purchase any financial instrument.)






All posts and charts are for educational and illustration purposes only
Friday, November 26, 2021


During the recent market outlook about two weeks back, I shared an interesting phenomenon I discovered on my trade plans for Dow Jones and S & P 500. 


Both charts were pointing towards a topping out pattern, reinforcing my conviction that a major market  correction is near the horizon.





All posts and charts are for educational and illustration purposes only
Tuesday, November 23, 2021

Nasdaq 100 Could Have Topped Out at 16,764.

Yesterday's Price Reversal followed by 3 days of volume surge signals more weakness to follow.
Trade Plan:
Short below 16,380
1st Target: 16,175
2nd Target: 15,720
3rd Target: 15,250
Cut Loss: 16,820 



All posts and charts are for educational and illustration purposes only
Wednesday, October 6, 2021

Sinopec (0386.HK) set to benefit from rising energy demand.

Crude oil prices reached close to 2014 peaks after the OPEC+ group of producers stuck to its planned output increase rather than pumping even more crude on Tuesday.
Numerous natural events happening across the globe (a freak winter freeze in Texas, lightning strike in Louisiana and hurricanes along the Gulf Coast) have conspired to disrupt production and raise prices of essential chemicals.
Sinopec (0386.HK) being a crude oil and chemical producer is likely to be a beneficiary of rising crude oil and chemical prices.


The stock has since broken out from 3-Year Downtrend!
Last done at 4.06.
Next target 4.09
Second Target: 4.37
Third Target: 4.70

Stop Loss: 3.70 

All posts and charts are for educational and illustration purposes only
Tuesday, October 5, 2021

PetroChina (0857.HK) Breakout from 13 year downtrend!



Last done at 3.97.

Next target: 4.35
Second Target: 4.75
Third Target: 5.11
Fourth Target: 6.30


All posts and charts are for educational and illustration purposes only
Monday, October 4, 2021

Stagflation scare is coming, get ready for it!

A stagflation scarce not seen since the 1980s is coming and we need to be prepared .

Financial Times article: “Italy’s poor households feel the pain of surging energy costs”, 27 September 2021)

Bed Bath&Beyond stock (NASDAQ:BBBY) plunged nearly 25% in Thursday’s trading as supply chain issues dented its second-quarter sales and forced the retailer to cut its annual guidance.Prices of raw materials rose, and coupled with higher freight costs, ate into the company’s profits.

Italian Prime Minister Mario Draghi on Thursday (23 September) announced measures worth three billion euros to keep gas and electricity bills down this winter as power prices soar across Europe.

“In the absence of government intervention, in the next quarter the price of electricity could increase by around 40%, and that of gas by 30%,” Draghi said.

We can expect for govt intervention globally to help consumers weather the effect of inflation.

Natural gas prices in America and Germany have now risen by 117% and 355% year to date, while the China thermal coal price is up 78%

A severe drought in Brazil is set to ravage orange juice, sugar and coffee adding to food inflation woes .

The energy crisis has prompted U.K. Prime Minister Boris Johnson to put the army on standby to ease shortage. China is so worried about the winter that it ordered energy companies to buy up supplies, no matter the cost.

We can also expect the Fed to stick to their lines that inflation is transitory quoting it’s because of the “special circumstances “ that the world is facing and it will blow away soon . Don’t believe it !


While the Fed is “ kicking the can down the road “ and not doing anything to stop inflation , the world is suffering the collateral damage to economic growth, and households’ real incomes, caused by the ambitious energy transition. The global green effort to curb carbon emission is causing a worldwide shortage of energy at a time the world is reopening from Covid pandemic


The energy crisis has prompted U.K. Prime Minister Boris Johnson to put the army on standby to ease shortage. China is so worried about the winter that it ordered energy companies to buy up supplies, no matter the cost.

The Chinese government measures to reduce energy consumption are having a dampening impact on growth , power shortages in China have already spread to 20 provinces as they race to meet emission targets before the Winter Olympics in February 2022 .

The continuing evidence in both America and Eurozone of labour shortages, when combined with the energy price surge, is making another inflation scare seem ever more inevitable and in irreversible at least until mid 2022. This should reactivated the cyclical trade in terms of a renewed outperformance of value over growth and by logic be negative for high multiple growth stocks particularly the overvalued tech stocks in the US market . Stay away from overvalued tech stocks for now !

I think the world is caught flat footed this time with the green effort backfiring and the Covid pandemic had added to the problem . What an ironies , the world is faced with a shortage of the second most abundant element of supplies and there is no easy way out , we need to be prepared and bite the inflation bullet .

By: Robin Ho






All posts and charts are for educational and illustration purposes only