Added to loser KWEB etf

The big Chinese internet etf is getting clobbered today, down about 9% as soon as US markets opened. Since I am not yet stopped out, and don’t yet have my full desired position, I will view this drop as an opportunity to pick up some LEAP options on sale. As I near the full position size, I will have to be more strict with how much room I give each contract to go against me. KWEB is still intended to be a several month trade, roughly 6-10 month hold time is my best guess, and it’s oversold too on the weekly charts. I will post both below since I have a few extra minutes and am not overly active today in the markets. I still have several buy limit orders in, and will report any fills I get through the email-alerts for members.

First, the monthly KWEB chart. Notice how oversold the stochastics are, nice setup, in fact the only thing I’m not thrilled about is the MACD is only now just turning lower after a huge uptrend the last few years. That might not be too troublesome, the moves in this etf are large enough that we could see great gains before we see too many technicals change on the monthly chart, as a result of the big Average True Range (trading ranges), especially on the longer term charts.

Now, let’s look at the weekly chart. The first thing that jumps out at me is the speed with which this etf has collapsed almost 50%! The second is the stochastics, quite oversold like on the monthly chart, but the weekly also sports a better looking MACD. So in a case like this, I can imagine many traders that take a shot of KWEB will be tempted to cash out after a good bounce, a bounce that shapes the weekly chart more positive like if the stochastics can reach overbought. However, I will try and push for more by sticking with the monthly charts prospective hold time of 6-10 months to turn the technicals positive. I can always change my mind if some new information pops us, but I typically find changing plans mid-trade hurts more often than it helps! I’ve already adjusted the Stops page to reflect the new LEAPS I’ve added, members should check out that tab and also the Daily Account Screenshot, which is an actual account I manage for a family member. I selected this account for the website because it was most representative of the style and size of accounts I managed when I maintained a license and handled retail accounts, whereas now it’s just Friends and Family accounts.

KWEB weekly chart says we should be due for a good bounce, too! Take your pick of what time frame interests you most, because KWEB is lining up on several.