Over the past few trading days, the stock prices for some of the Chinese tech companies such as Alibaba surged by more than 10%. Is this a sign of recovery and the end to the long wait?
Well, we cannot be too quick to celebrate yet. If we take a look at the charts for Alibaba on the daily candles frame, there seems to be some kind of strong resistance at the 50SMA. The prices for the Alibaba stock$阿里巴巴-SW(09988)$ listed on the HK exchange has just hit and tested the 50SMA today. We have to continue to observe over the week to see if there is higher buying pressure to push up the prices beyond the 50SMA to break off from this strong resistance. Currently, the stock is still on the downtrend.
Over at Tencent$腾讯控股(00700)$ , we see something similar playing out. The prices have just tested the 50SMA over the past few trading days. Whether the prices will be able to break out of the resistance, we have to give it time for things to play out accordingly.
As a long term investor with positions in some of these Chinese tech companies, I'm not emotionally affected by the short term volatilities. If the prices manage to bounce back up within the next quarter, I would be happy to see my portfolio doing well. If I have to wait for a longer period for the recovery, I would stay equally calm about it and avoid panic selling. No one knows when is the exact end to this selloff but the best defense we can do is to stay invested in these companies which we have conviction in for their stong fundamentals. And of course, you still have the bullets, you can even add some positions at a good price now 😉
P.S I did a video sharing on my views on the China market selloff. You may watch it here to find out more👉 https://youtu.be/zliTt384Y44
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