General Market commentary

Market gapped up again but reversed and closed lower. The gap below is prone to get filled. Midterm risk is still elevated due to bullish sentiment. On market themes, CL Capital has a hypothesis: the “recovery plays” are under pressure recently due to tax loss reasons. However the “COVID/tech plays” like ARK holdings sellings are light because of this year’s incredible returns. Do we see market leaders shift in the next month as the new year begins? We’ll find out. Be prepared for market rotation and always position your portfolio in the best performing names!

Quantative market model signal

Midterm trend: moderately bullish
Midterm risk: high

Featured charts

PDD has made a yuuuuuge move and closed up +15.57% for the day. A large cap stock doesn’t move like this very often without reasons behind it. We had shared insights on CL Capital’s public twitter today:

$PDD is up +14% today. What does this tell you? The market likes $PDD's hypergrowth and considers it as a $BABA replacement for China E-commerce exposure. This tells you almost all the funds are potentially under-allocated $PDD therefore it will have a sustained strong demand. pic.twitter.com/Igk27O3oh7
— CLCapital (@RealCLCapital) December 29, 2020

Now is the technical analysis part: On weekly chart, PDD decisively broke out of the 6-week consolidation on volume. This move could take PDD to 200 soon. CL Capital has been bullish on PDD around 80 and ever since. The underlying strong fundamentals for PDD just can’t be ignored. Active buys grew to 731.3 million according to PDD’s recent earnings report, a 36% YoY increase. Believe it or not, Pinduoduo’s active user base is going to surpass that of Taobao.