China’s Back, Back Again!

China is kicking off the week with a bang and we’re moving out on the risk spectrum, buying some of the most offensive stocks. 

We were early to this trend reversal in 2024, betting big on a theme few believed in at the time. 

Bull markets in China aren’t the steady drift kind. They come with violent ups and downs, and it’s not uncommon for these stocks to make major moves in both directions.

Things got too hot, too fast in the back half of last year… and the entire group needed some time and space to cool off. 

Bullish sentiment had reached short-term extremes as the narrative shifted from “Never China” to fearing they would win the AI race in a span of a few quarters. 

Fast forward to today, and sentiment as well as technicals have been reset as Chinese equities have endured a multi-month corrective wave. 

Against that backdrop, China is quietly starting to trend higher again.

We recently sold a quadruple on some BIDU calls for Breakout Multiplier, and it’s not the only blue-chip China name seeing a surge in short-term momentum.

But if China is really going to wake back up, it’ll be the smaller, higher beta and more speculative names that stand to benefit the most. 

Here’s the CSI 500 China A Shares Small Cap ETF $ASHS pressing against the breakout level of a massive base.

Think of this one as the S&P 600 of China. 

As always, we want to lean into relative strength. 

We have sorted our Chinese Universe by proximity to 52 Week Highs so that the strongest names rise to the top.

Here are our favorite individual setups and preferred vehicles for the China speculative growth theme.

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