We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Elite Chinese Internet Stocks Pulling Back to Support
Leadership Potential
Over the past three months, Chinese-based internet stocks have been amongst the strongest in the market. The KraneShares CSI China Internet ETF is amongst the most followed Chinese ETFs in the United States. Before pulling back recently, the KWEB ETF had more than doubled since making dramatic lows in late October 2022.
Because of the abrupt and unrelenting rally off the lows, investors who blinked or had doubt sowed into their minds about Chinese-related names likely missed the move. However, after a recent pullback in these leaders, they may offer investors a second chance.
All Pullbacks are Not Created Equal
There are subtle attributes for investors to know about when sizing up the risk to reward the potential of a pullback, including:
1. Early Pullbacks Offer Attractive Risk to Reward: Often, the initial pullback to the 50-day moving average in a trend offers investors the most optimal buy zone. As a trend ages and gets longer in the tooth, the number of times you can “go back to the cookie jar” decreases. Chip maker Lattice Semiconductor is a prime example.Recently, the stock pulled back to its 50-day moving average for the first time and found support before taking off again.
2. Power and Distance are Correlated: When it comes to the stock market, strength tends to beget strength. In other words, the stronger the price trend into the first pullback, the further the trend is likely to continue.
3. Surprises Tend to Happen in the Direction of the Trend: Stocks in bullish trends tend to remain in bullish trends more often than not. For example, a stock trending strongly into earnings is more likely to gap up than down following the release of results – with all else equal.
Chinese Internet Names Offer Pullback Buyers a Second Chance
Investors who missed the gigantic moves in Chinese internet stocks over the past few months are getting a pullback opportunity. Three of the strongest names include Alibaba, JD.com and Vipshop. Each stock has more than doubled off last year’s lows, holds a Zacks Strong Buy Rating, and is pulling into the 50-day moving average for the first time in this trend.
Bargain Basement Valuations
The technical picture is not the only positive attribute these stocks have. Following the multi-year pullback in these stocks, valuations are getting much more attractive. For example, from a P/E perspective, BABA shares are at their most attractive levels since inception.
Analysts Are Bulled Up
Judging by consensus estimates, analysts believe that the earnings momentum is just starting from a growth perspective. For instance, in the past 60 days, consensus analyst estimates for JD’s Q2 earnings have risen by 25%.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks Investment Ideas feature highlights: KraneShares CSI China Internet ETF, Lattice Semiconductor, Alibaba, JD.com and Vipshop
For Immediate Release
Chicago, IL – February 2, 2023 – Today, Zacks Investment Ideas feature highlights KraneShares CSI China Internet ETF (KWEB - Free Report) , Lattice Semiconductor (LSCC - Free Report) , Alibaba (BABA - Free Report) , JD.com (JD - Free Report) and Vipshop (VIPS - Free Report) .
3 Elite Chinese Internet Stocks Pulling Back to Support
Leadership Potential
Over the past three months, Chinese-based internet stocks have been amongst the strongest in the market. The KraneShares CSI China Internet ETF is amongst the most followed Chinese ETFs in the United States. Before pulling back recently, the KWEB ETF had more than doubled since making dramatic lows in late October 2022.
Because of the abrupt and unrelenting rally off the lows, investors who blinked or had doubt sowed into their minds about Chinese-related names likely missed the move. However, after a recent pullback in these leaders, they may offer investors a second chance.
All Pullbacks are Not Created Equal
There are subtle attributes for investors to know about when sizing up the risk to reward the potential of a pullback, including:
1. Early Pullbacks Offer Attractive Risk to Reward: Often, the initial pullback to the 50-day moving average in a trend offers investors the most optimal buy zone. As a trend ages and gets longer in the tooth, the number of times you can “go back to the cookie jar” decreases. Chip maker Lattice Semiconductor is a prime example.Recently, the stock pulled back to its 50-day moving average for the first time and found support before taking off again.
2. Power and Distance are Correlated: When it comes to the stock market, strength tends to beget strength. In other words, the stronger the price trend into the first pullback, the further the trend is likely to continue.
3. Surprises Tend to Happen in the Direction of the Trend: Stocks in bullish trends tend to remain in bullish trends more often than not. For example, a stock trending strongly into earnings is more likely to gap up than down following the release of results – with all else equal.
Chinese Internet Names Offer Pullback Buyers a Second Chance
Investors who missed the gigantic moves in Chinese internet stocks over the past few months are getting a pullback opportunity. Three of the strongest names include Alibaba, JD.com and Vipshop. Each stock has more than doubled off last year’s lows, holds a Zacks Strong Buy Rating, and is pulling into the 50-day moving average for the first time in this trend.
Bargain Basement Valuations
The technical picture is not the only positive attribute these stocks have. Following the multi-year pullback in these stocks, valuations are getting much more attractive. For example, from a P/E perspective, BABA shares are at their most attractive levels since inception.
Analysts Are Bulled Up
Judging by consensus estimates, analysts believe that the earnings momentum is just starting from a growth perspective. For instance, in the past 60 days, consensus analyst estimates for JD’s Q2 earnings have risen by 25%.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.