LONG TENCENTExpecting bounce from extremely oversold weekly and daily levels. If low breached, be ready to re-enter at lower levels with tight stops until low is in.
TTTencent Holding Ltd.
65.57USDD
−0.69−1.03%
Last update at Jun 10, 19:58 GMT
USD
No tradesPre-market
TCTZF trade ideas
Potential death cross on HKSE 700 (Tencent) in formation 1. Would be extremely cautious as death cross forming with EMA20 and 50 crossing EMA200. Possibly around price of HK$350 in coming 2-3 trading days.
2. Oversold now but remains to see if rebound can support at $330 will hold.
3. Price has already retraced to 50% of run up to HK$480.
4. Would not enter until we see support hold at either HK$325 / HK$300 (higher probability) confirmation. Or some low chance of price falling until strong resistance at HK$260, erasing all gains.
HKEX:700
My Tencent worth...Following most Chinese Internet Companies, #Tencent succumbing to the Trump tax-blow. A breakthrough it’s 6-month support line does not paint a pretty picture for the share price going forward.
Next support level could be around the lows of March (350HKD), with a break most probably testing the 200-day moving average at 334HKD. Share price has lost a lot of its strong momentum and would I either wait for a better “tweet” from Trump or for momentum to turn. Although the share price is somewhat oversold according to its 14-day RSI, I would add to wait for it to dip below the 30 mark.
The longer-term outlook for the company is still looking positive with a consensus (according to Thomson Reuters) target price of 425HKD. Be patient…
Tencent Holdings: Medium Term Technical AnalysisTencent: Medium Term Technical Analysis HKEX:700
A review of the weekly chart sees the price respecting three (3) trend line resistance levels:
1. Going back to March 2014
2. The underside of the incline support going back to February 2016, which is also a sharp back-test of the prior breakdown.
3. The incline support going back to October 2018.
It should also be noted that the current breakdown as per the Relative Strength Index (RSI) closely resembles the prior price action of 27-Arpil-2015, 26-September-2016 and 22-January-2018. At current levels, the 40-week/200-day moving average trades at HK$333 which may act as a natural target should the short term weakness persist.
My Tencent(s) worth - $700Tencent having a bit of breather this week after a great little run that started 4Jan19. Share price now getting close to the bottom of the channel (which is 329.60HKD), with the 50-day moving average (325.19) being a strong resistance level. A break below the 50-day MA could see us test the 304.60 levels.
Share price is still above the 50-day MA, which are still pointing upward (the MA). This make the trend still healthy. A bounce off the channel could see us test the 200-day moving average at 342.95, with next resistance being at 363.
Consensus forecasts are still very bullish on Tencent, with Thomson Reuters 12 month forecasts still showing 17% upside from current levels (according to mean forecasts from all analysts covering Tencent).
Long Tencent On Pullback & Fav Macro WindsRecording this trade:
Long Tencent
-Entry: $343.80
-Stop: $340.80
-Target: $350.80
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I was quite conflicted while taking this long trade as I was wondering why did Tencent drop when peers like Ping An and Xiaomi were all rallying.
There was good news on the trade war side and I did read reports of challenging times for Tencent. I have even considered going short but then I realized that this is a short intra-day pullback and decided to go long.
I don't have any special analysis on this long trade, just the simple candlestick chart that shows a bullish Tencent and general belief that the market had turned bullish despite concerns on Chinese growth and debt levels (even with the Qinghai default).
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Recording this to see how the trade will go.
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