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

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