Here we are after a week of looking and particpating in the financial markets. Isnt it great to have two good days of rest without looking at the markets? Well, for people like me, I am really passionate about the financial markets and am constantly thinking and analysing the markets when I have the time. Hope my articles and posts here on Tiger platform would create value for you in navigating the "rocky" financial markets. Remember volatility if used correctly will be our tools to create wealth, at least this is what I believe in.
So what has happened this week? Well markets are not that easily forecasted as can be seen since top tier investment banks dont get it right all the time. I still remembered in 2008 when a tier 1 investment bank said that oil price can hit 200 USD per barrel. During the years from 2008 till now, we have seen oil price falling to negative value last year before it climbed back steadily to above 70 USD. Is the global economy really coming back strong? Who can say for sure... COVID-19 delta variant is appearing in a number of countries and infection rates have gone back up... Europe has also seen an increase in cases after 10 weeks of decline based on a report that I have read.
For Nasdaq 100, readers know that I do expect Nasdaq 100 to hit 16,000 as long as my support levels at 14,000, 14060 and 14160 to 14180 are not breached. Well, I do expect volatility to cause some retracements here and there and if readers are to search through my posts on 24 June 2021, I did specifically shared my concerns for shortsellers of $微型NQ100指数主连 2109(MNQmain)$ Nasdaq 100 futures and informed them to manage and control their risks. Since then, Nasdaq 100 futures had opened at 14,350 and closed at 14,512 on Monday and slowly climbed again to 14.563 on Tuesday and after fluctuating around 14,584 to 14,475 on Wednesday and Thursday, it surged all the way to 14,713 on Friday! Yes, we are inching closer and closer to 16,000. Will I continue to be right? Who can say for sure until the future event takes place. There is no certainty that this will happen. But at least the tide is consistent with my view. If you remembered those days back in a couple of months ago when I mentioned that I remained cautiously optimistic, alot of naysayers were still saying the markets are crashing... Things have certainly turned when I read more reports giving S&P target of 3,600...
For Dow futures, after the recent weakness, I have stayed out of this instrument, advocating that both a long or shortselling would not be wise. Indeed, focusing my capital on selected tech stocks have resulted in me outperforming the Dow performance as well as the commodities' price performance and the broad markets in general. I still remember a couple of months ago when copper price was around 4.85 USD. Copper price is around 4.28 USD if I did not remember wrongly and it has tried breaking the support of 4.25 USD several times these few days. So far, the market indicators that I am tracking are still not flashing any concerns for the bulls to end. Indeed, there are still plenty of naysayers who have derisked significantly in June 2021 and they have missed out the recently rally. Even professional fund managers who have called for at least a correction (not exactly a crash) have underperformed the broad markets.. With this happening, these parties who are on the sidelines will as usual have a fear of missing out ("FOMO") and add "fuel" and provide more "legs" to this rally.
Big tech like Microsoft, $亚马逊(AMZN)$ , $苹果(AAPL)$ , Netflix have all done very well this week, playing the catchup since smaller cap tech stocks have rallied from anything like 30% to 60% (in some cases, even ore) from the low of May (think around 12 May 2021) to 2 July 2021.
My view is that once Big tech is taking a breather, the rotation will go back to the good tech stocks, which are smaller in size. Companies that I have covered and have openly declared positions include Tiger Brokers $老虎证券(TIGR)$ , Huya $虎牙(HUYA)$ , etc. Etsy is a not bad ecommerce platform, of which I had recently written an article on my thoughts on it. For Chinese tech stocks, the recent pull-back over the last couple of days arose in connection with privacy, cybersecurity, etc, which led to Huya declining by around 5% (at the first support that I mentioned a week ago of 16.5 USD) over 2 days and Bilibili coming down around 2% yesterday. Xiaomi had also been impacted partly by this series of concerns where we see the price coming down from over 28 HKD to 25.95 at one moment yesterday. This happened within a span of 1 to 2 weeks. At the support level of 26 HKD, we have to watch out to see if Xiaomi can hold at 26 HKD. If it couldnt, the next support will be 24.6 HKD.
Tiger Brokers' price chart
Huya's price chart
Lemonade has done relatively decently after finding BREAKING 100 USD and finding support at 100 USD.. IT has at one moment hit 113 USD from what I recalled and had also been slightly affected yesterday where the chips went into big tech. Lemonade closed at around 107.56 USD yesterday. Etsy has also not held its support at 200 USD and closed at 197.57 USD yesterday. Support for Etsy after breaching 200 USD, would be at 193 USD and we really have to see if it can find the support at this level. If not, I will probably only wait till it retraced to below 180 USD before considering a position in it. Nevertheless, readers should consider reading my article on Etsy if you are keen to find out more. Palantir after hitting a high of 27.44 has also retraced back to a critical support of around 22 to 24.5 USD range.
We have to see if these few days sale of the smaller tech stocks are over for now and see if the support can be defended. My optimistic view of Tiger Brokers (as a long-term investment) and Huya (due to its market position) has not changed. In fact with Tiger Brokers getting more and more international, with it gaining traction in winning overseas customers (myself for instance have switched from a local broker in Singapore to using Tiger Brokers solely), I seriously do not think China's regulation over tech stocks will implicate Tiger Brokers. As for Huya, it is smaller than Bilibili and Kuiashou Tech so if there are regulations, the regulations should hit Huya's competitors more and therefore benefitting Huya. Nevertheless, lets watch out for 2Q2021 results before I comment more on this company. I have been building a position in Huya over this week though.
Hang Seng spot has also fallen after rising above 29,000 and came down badly by over 2% and breaching three levels of support at 29,000, 28,700 and 28,460. I had mentioned before that if Hang Seng spot breaks 28,000 badly, I will consider reducing some exposure in Hong Kong stocks and move some of my capital from Hong Kong to selected US tech stocks.
Shanghai market has not broken 3,500 and Shenzhen index is hovering around 14,700. Lets see if the support can be found within these two levels. I remain cautiously optimistic of these two indexes though I do not have a direct exposure in these two indexes or shares listed on China' exchanges.
As always, the above should not be construed as any investment or trading advice.
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