📉 CHINA50 // preparation for landing
How to trade the next impulse in the countertrend
Key Chart (H4)
The market is in deep in the correction of the September long impulse, passing the 61.8, going for the 78.6 level.
The weekly short countertrend is valid, and on the daily, the long structure was broken by one wave. After this break, the long countertrend on H4 printed a huge wick.
The deeper we go, the risk increases, but if the last clean H4 breakout is broken significantly, the daily target fibo levels and the weekly breakout are valid targets.
Key Fundamentals
Summary
The FTSE China A50 Index, a benchmark for China’s top 50 A-share companies, reflects the broader trends of the Chinese economy. The index is currently influenced by slowing economic growth, fiscal stimulus measures, and geopolitical uncertainties. Analysts remain divided, with some highlighting long-term opportunities while others point to near-term risks.
Key Factors
• Economic Slowdown:
China’s economy has faced headwinds from weakening domestic consumption and a sluggish property market. According to Reuters, property sector woes have dampened economic growth, contributing to lower market confidence.
• Government Stimulus:
The Chinese government has introduced fiscal and monetary measures to stabilize the economy. Analysts at Bloomberg suggest that infrastructure spending and tax cuts could provide moderate support to corporate earnings.
• Global Trade Dynamics:
Tensions with the U.S. and a slowdown in global demand for Chinese exports are putting additional pressure on the economy. However, CNBC notes that China’s pivot toward ASEAN countries may help mitigate some of these effects.
• Sector-Specific Trends:
Key sectors within the index, such as financials and consumer staples, show mixed performance. While banks benefit from policy support, consumer spending remains subdued, according to Morningstar.
Actionable Insights
• Bullish Case:
Long-term investors could benefit from China’s structural economic reforms and policy-driven stimulus. Companies in infrastructure and green energy sectors are likely to outperform.
• Bearish Case:
Short-term risks include weak domestic demand, ongoing property market issues, and geopolitical uncertainties, which may weigh on corporate earnings and investor sentiment.