In today's Equity Leaders Weekly, a document that often takes a high-level view of the markets, an analysis of international markets was completed. Among the various markets, China and Hong Kong showed notable relative strength movements, although still in the "neutral" zone and average at best. This sparked a deeper look into the SIA International Equity ETF Report, where the usual suspects appeared at the top and bottom. Sorting for "Quarterly Performance Rank" revealed a cluster of relative movers, and China was a prominent theme. While Trump 2.0’s threats of tariffs on BRIC nations are in the spotlight, China, the largest component of the BRICS, appears to be climbing the relative strength matrix at a fast pace. The attached table highlights a list of China-focused ETFs, with the exception of the KPOP & Korea Entertainment ETF and iShares Singapore ETF (EWS), which stand out in an otherwise China-dominated list. The next step in identifying individual stock opportunities in China is to review the SIA International ADR Index Report, where Kingsoft Cloud Holdings Ltd. ADR (KC) stands out.
Shares of KC were first detected several weeks ago as the stock moved up in the SIA relative strength ranks. When the SIA Hypothetical Model triggered a sell alert, KC was the top name and was subsequently added to the 5-stock model. Now, KC sits alongside Sea Ltd. ADR (SE) from Singapore, Qifu Technology (QFIN) from China, Rolls Royce ADR (RYCEY) from the UK, and Embraer ADR (ERJ) from Brazil. KC’s relative strength remains strong, especially as it has recently crossed several technical hurdles. The stock has rebounded from a significant decline, falling from over $70 to under $2, before recovering to its current price of around $8. Support levels for KC are indicated at $7.41 on the three-box reversal chart, with stronger support at $7.12 and $4.99 from 2022. Further support extends at $3.98, another level from 2022. Resistance does not materialize until $9.40, with additional resistance at $12.90 and $16.69—levels that were significant trade ranges in 2021/2022. KC has earned a perfect SMAX score of 10 out of 10, indicating strong relative strength compared to other asset classes like cash, bonds, currencies, commodities, and equity benchmarks. For those who require a fundamental review alongside this technical analysis, a box in the point and figure chart lists analysts who cover Kingsoft Cloud (KC).
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