China Stimulus Announcement Gooses Commodity Markets and China Equity Names
By
Mike Paulenoff
Good Tuesday Morning, MPTraders! September 24, 2024-- Pre-Market Update: China unveils a huge monetary and economic stimulus program to put a flame under its sluggish economy (lest President Xi's opposition comes out of the woodwork), which has goosed China equity names (BABA, YINN, et al), to a lesser extent US and global equity indices, but especially commodity markets that have been yearning for a resurgence of Chinese demand for years...
Yesterday, with BABA trading around 89.20, my chart post comment stated the following:
My attached 4-Hour Chart of BABA (a proxy for the China market?) shows a year-long rounded base-accumulation pattern that is nearing a technically powerful upside breakout plateau at 90 that if hurdled and sustained, will trigger potential targets of 95-97 and 100-103...
This morning, we find BABA up 5.5% at 95.06 as the stock enters my next higher Target Zone (95-97). See my attached 4-Hour Chart. BABA thrusts powerfully above a year-long base-accumulation period and pattern that should have staying power into the year-end. Last is 94.95...
NYMEX Crude Oil is up 2.3% this AM, likely due to prospects for increased China demand in the upcoming weeks and months. November Crude hit a September recovery rally high at 72.36 from its 9/10/24, 9-month low at 64.04 (+13% from the low). Let's notice that Nov. Crude is bumping up against critical resistance lodged between 72.50 and 73.85 (see my attached Chart), which, if hurdled and sustained, will point Oil toward 78-80 next... Last is 71.92...
FCX (Freeport-McMoRan) is up 4.9% in reaction to the China news, implying investor anticipation of renewed demand for this company's products, namely Copper, Gold, Silver, and Oil. FCX has leaped out of an 8-week corrective base-accumulation period and pattern that projects near-term upside potential to 51-53 and to 55-57... Last is 47.34...
With BABA, November Crude Oil, and FCX, let's see if and how much of today's pre-market strength is retained by today's closing bell... MJP
