Alert! Snap Back China Stock!

May 9, 2019
By Vlad Karpel

RoboStreet – May 9, 2019

Spring Loaded Stock Awaits Trade Deal Headline

This week’s market volatility is fully tied to the breakdown in the U.S./China trade negotiations following China’s backtracking on crucial elements to the terms of the proposed deal – namely the theft of intellectual property and forced transfer of technology that help China keep pace with U.S. innovation. Some fear there will be a “Cold War” in technology with China, but this is drummed up rhetoric in that while China is masterful at stealing and reverse engineering U.S. technology, it suffers greatly from a low level of proprietary ingenuity and innovation.

China’s global ambitions seem to require the acquisition of IP and technological innovation from abroad in exchange for open access to their large, populous markets which they can otherwise close off to foreign corporations. They know this and we know this.

Under this assumption, there might be a framework crafted for a trade deal with China announced as early as this weekend or soon thereafter, but from the rationale that China will always be one step behind America’s technology advantage, there is no logical argument that would suggest that China will discontinue or suppress IP theft and forced technology transfer from U.S. companies willing to cave in on such demands in order to access that vast economy.


 “I’m investing my own money in each and every stock as my AI platform identifies.”

And remember we’re not talking about day-trading here.  I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.

Click Here – To See Where I Put My RoboInvestor Money


In fact, U.S. Treasury officials interviewed 200 large U.S. companies where IP theft had occurred and none would press charges because they didn’t want to be shut out of the Chinese marketplace. The monetary temptation for many American corporate chieftains is just too great and thus the government has to get involved to protect one of America’s most vital and cherished national treasures – our wide innovative edge on the world.

So, let’s just for a moment come to the understanding that a deal does take some form in the next week or month that satisfies all the “powers that be” for the time being. Long term moral hazard implications aside, everyone wants a deal. It’s politically and economically expedient, keeps a bid under global equity markets and essentially lets China off the hook. China plays the “market access” card as well as it can be played and therefore a deal with multiple conditions will likely be arrived at in the near future.

Once the headline crosses the tape that the U.S. and China have agreed on a date for President Trump and President Xi to meet and exchange signatures, it’s my view a certain company’s stock will get bid strongly higher as it stands to lose the most and gain the most from a trade deal. I’m talking about Alibaba Group Holding (BABA), the equivalent of the U.S. based e-commerce giant Amazon.com.

Alibaba operates like Amazon and eBay together, serving both consumers and B2B customers alike while also operated a fledgling online financial arm called Alipay as a secure payment system. Alibaba’s market cap has mushroomed in recent years to its current $465 billion valuation. Online retail sales in China grew by 23.8% in 2018 to just over $1.3 trillion dollars. As it stands now, China’s retail market will become the largest in the world in 2019, surpassing the U.S. where sales will top $6 trillion dollars in 2020.

As of the end of 2018, Alibaba had a 58% share of all retail e-commerce sales in China and revenues are forecast to top $55 billion this year. And while that is about one-fifth of the $275 billion Amazon is forecast to generate, Alibaba’s top line is growing by 53% this year compared to 18% for Amazon.

Shares of Alibaba were just breaking out of a three-month base when the threat of new tariffs was reported earlier this week. The stock has since pulled back from $195 to $180 as fears of how 25% tariffs might affect sales and profits. This is the quintessential trade deal stock and will surely react to headlines with a high level of volatility.

I highly recommend using the power of AI to determine when and what price to buy into Alibaba given the huge opportunity coupled with the highly fluid situation surrounding a possible trade deal. The stock is showing two of four bullish probability readings from my proprietary AI platform, which means the stock could trade sharply in either direction. Like Amazon, you can buy this stock just right or way overpay on a false move. This is where my RoboInvestor advisory takes on the job of getting it right.

In the past year, my AI-driven system has scored a 93.22% winning trade percentage with the average trade gaining 4.77%. Of the 59 trades we’ve closed out, we’ve rung the register on 55 of them. We’re not looking for home runs, because that typically involves multiple strikeouts. We’re looking to win on 9 out of every 10 trades – and doing it week after week, month after month.

True wealth creation occurs on a daily basis utilizing a time-tested business model that delivers consistent results where gains are steadily compounded that results in a flourishing portfolio where rewards far outweigh the risks when harnessing the power of artificial intelligence tools. Put RoboInvestor to work and give me the opportunity to go to work for your portfolio 24/7. My machines never sleep and they never stop learning how to make us all a little bit smarter and a little bit richer each and every day.


 “I’m investing my own money in each and every stock as my AI platform identifies.”

And remember we’re not talking about day-trading here.  I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.

Click Here – To See Where I Put My RoboInvestor Money

*Please note: RoboStreet is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services.  If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, MonthlyTrader, or RoboInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.

 


Comments Off on