How to chart NetEase and JD.com When It Is just Listing In Hong Kong Exchange

NetEase has started its secondary-listing on Hong Kong Exchange Since June 11. The stock trading in HKEX opened at HK$133 and then dropped around 6% to the recent low at HK$125.1 on Monday....

Charts (1)

NetEase has started its secondary-listing on Hong Kong Exchange Since June 11. The stock trading in HKEX opened at HK$133 and then dropped around 6% to the recent low at HK$125.1 on Monday. Then, the stock prices rebound around 3% on June 16 due to the rise of the global market on that Federal Reserve said it would start buying individual corporate bonds.

In fact, NetEase's ADR stock has a similar trend. It retreated around 5.8% from June 10 intraday high at $426.88 to June 11 to the low at $401.78 on Monday. Then, the prices rebound on Tuesday as well.

On a daily chart, NetEase's adr stock (NTES) is forming a consolidation zone between $402 and $428. 

Currently, the stock prices remain supported by a bullish trend line drawn from March low and rising 20-day moving average, indicating a positive outlook.

As the prices do not change much, the support level remains at $360 (the previous low) and resistance levels would be located at $428 (recent high) and $482 (138.2% Fibonacci projection). A clear break above $428 would validate a bullish breakout of consolidation zone and call for a rise to $482.


Source: GAIN Capital, TradingView


For technical analysis, as NetEase has similar movement when it trades in the U.S. and Hong Kong, we can convert the support and resistance levels from the U.S. market to Hong Kong's stock.


Source: GAIN Capital, TradingView

Therefore, we converted the major support level to HK$112, while resistance levels would be HK$133.2 and HK$150 respectively.

Currently, NetEase (9999.HK) drops around 2% and tests HK$125, which is around the lower boundary of consolidation zone level at $402, on the drop of the global market. Holding above HK$125 should consider a range bouncing to HK$133.20.

Notice that Hong Kong's Hang Seng Index is dropping around 1% as the U.S. and Europe failed to reach the agreement about the digital tax deal.

Alternatively, a break below HK$125 would trigger a deeper pullback. However, the level at HK$112 should provide support to the stock prices.

For JD.com (9618.HK), today is the first day of its secondary listing in Hong Kong Exchange. We could use a similar method to convert it's ADR stock's support and resistance levels to Hong Kong's stock.


On a daily chart, JD.com 's ADR stock (JD) is extremely strong and makes a new record high. Currently, it's support level raised to the overlap support level at $56.40, which is around HK$220.

The resistance levels would be located at $64.8 (100% Fibonacci Projection) and $74.3 (161.8% Fibonnaci projection), which would convert to HK$252 and HK$289 respectively.


Source: GAIN Capital, TradingView

More from Equities

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.