Hang Seng Tech Has Arrived? Money rotates from US to China?

The Hang Seng Tech Index ‌$HSTECH(HSTECH)$  ‌ has been consolidating within the broader Hang Seng Index ‌$HSI(HSI)$  ‌since February 14, 2022 (Happy Valentine’s Day!). Last week, it successfully broke out with a strong upward move, clearly surpassing the consolidation range and closing above the 200-week EMA.

Actions: 

1. Holding Position ‌$BABA-W(09988)$  ‌$Alibaba(BABA)$  :

I am not increasing my allocation to Alibaba, as I already hold a 25% position, and the RSI is approaching overbought levels. I am also not selling or considering selling covered calls. I am mentally prepared to stay on the sidelines as we approach the February 20 earnings report. I expect strong earnings and bullish guidance, but I will avoid making any moves for now.

2. Initiating and Scaling Position in NIO ‌$NIO Inc.(NIO)$  ‌‌$NIO-SW(09866)$  :

I have started a position in NIO and plan to add aggressively, as it remains one of the few tech names still consolidating. On January 30, 2025, NIO announced the repurchase of $378.3 million of its convertible senior notes due 2027, which reassures me about their financial stability and confidence. While the recent January sales data (up 40% year-over-year) might seem like a distraction due to seasonally weak holiday sales, I remain focused on the bigger picture. I anticipate NIO might perform a liquidity sweep to flush out stop losses before moving higher, similar to Alibaba’s recent price action. However, I am not waiting for that to happen before adding to my position

Additional Observations:

I’ve noticed an interesting divergence in stock prices between asymmetric Chinese and U.S. companies. Could this signal a rotation play from the U.S. market to China? ‌$Invesco QQQ(QQQ)$  ‌‌$SPDR S&P 500 ETF Trust(SPY)$  ‌‌$KraneShares CSI China Internet ETF(KWEB)$  ‌

1. ‌$BYD COMPANY(01211)$  ‌up; ‌$Tesla Motors(TSLA)$  ‌down

2. ‌$Alibaba(BABA)$  ‌up; ‌$Amazon.com(AMZN)$  ‌down

3. ‌$SMIC(00981)$  ‌up; ‌$Taiwan Semiconductor Manufacturing(TSM)$  ‌down ( lesser )

4. ‌$LENOVO GROUP(00992)$  ‌up; ‌$Dell Technologies Inc.(DELL)$  ‌down