The recent fire sales on Chinese futures (HSI, Shanghai Composite and CN50) has investors panicking on whether to pull out or buy the dips.
My opinion:
Recent crackdown on big Crown Jewels has the retail investors going crazy, as when will the Chinese Government (CCP) stop intervening with the financial markets. Truth is, they will always control to prevent unfair monopoly competition and stock manipulation like the hedgies in USA.
As a result of anti-monopoly regulations and other policies to improve fair competition and boosts innovation, CCP sent all Chinese stocks down to at least 30% or more.
What will I do:
It all boils down to risk management, when trading futures! Recently, the chart has shown a beautiful double bottom. However, there is still uncertainty on whether the bears will come sending another shockwave to new lows for all Chinese futures. That will depend on CCP's decision whether to further implement more policies to regulate the Chinese market.
I think this might be a fantastic opportunity to get them at a discount. In addition, there is no way for us to time the market, as will the Chinese futures find another bottom or having a reversal.
Hence, I use risk management to bet on the long side for futures and Chinese companies. I meant Chinese companies that has good fundamentals and is known in the Chinese market. Will the Chinese dragon rise from the bottom to new highs, that's a question we all want to know! Time will tell...
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