This was what happened yesterday during Deepavali. HSI crash 6%, HS Tech drop at least 10%. Many investors sell out in fear. Foreign investors pull out of HK. Did you panic and cut loss? Many people share that this may be capitulation. What do you think?
Capitulation
According to Investopedia,
Do you think Capitulation has happened? It may be and it may not be in my opinion. If it is capitulation, it generally means that we are likely nearer to the bottom than the top. Seller exhausted and reversal happen for uptrend…
Today 25 Oct 2022
If you look at today, the HSI up when opening (perhaps due to short cover) and then close flat at the end of the day. Then if you just do a simple google, everywhere are bad news about HSI, CCP etc.
The crash yesterday many people shared that it is due to Xi announcement of Key personnel which are all his loyalist. They now have two main goals to achieve – GDP growth and Common Prosperity.
To achieve these two goals, there are too many uncertainties in HSI, China. Businesses, bosses are worried, what if you grow your revenue/companies too big and then suddenly some regulation come in and whatever you have built over the years are gone overnight? Do you remember ANT IPO? Education industries? There are too many uncertainties now. Besides, the macro also doesn’t look good – Russia War, US inflation rate that results in the ever-increasing interest rate, winter energy issue at Europe etc.
For me I will stay sideline for HSI, China first. Wait situation clearer before taking any action. I may miss the bottom, but I won’t catch falling knife. No one can catch the bottom anywhere. This is not a simple crash.
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