Asian stocks are pulling back and opportunity may soon be knocking.
Today we look at the stock market pullback in China / Hong Kong and highlight why continued weakness into month-end could be good for opportunistic investors.
While many view the Shanghai Composite as being “China”, many of the shares are illiquid or not heavily traded. With this in mind, I think it’s better to analyze the HSCEI or Hang Seng China Enterprises index. This Index rallied sharply from mid-August but has begun to stall and sell-off in recent days.
It’s right to watch carefully as this is exactly what i thought would happen (technically) and this could lead to stabilization near the lows and offer a decent opportunity to buy dips. While a pullback down to 8750 would be a full retracement, I think it’s right to watch for evidence of any buying above this level which, in turn, may lead to the index higher to take out 9551. Watch those lows!
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