Tencent's Rocket Ride: Heading for 1338 HKD?
Updated
For Tencent Holdings, we currently believe we are in an overarching Wave III, which should be created with a 5-wave structure upwards. This should naturally extend far beyond the Wave I level at the all-time high of 715 HKD. We anticipate a rise to at least 1338 HKD for this overarching Wave III. Wave II concluded at 188.6 HKD. Zooming in, we see that we are about to complete Waves (1) and (3) and soon enter into the Wave (3). Wave (2), as we expect, might dip slightly further, to 241 HKD. However, we are convinced that we could be in a long upward trend. Therefore, we do not want to be stopped out prematurely, as it would be quite unnecessary. A double bottom at 188 HKD cannot be ruled out. Thus, we place our entry at the 50% extension for the very subordinate Wave ((v)) and just above the 78.6% retracement level for the subordinate Wave (2). This would create what's known as a Fibonacci retracement cluster, where there should be a significant buying potential. We will see how it unfolds in the coming weeks or days. Should there be a rise above 297 HKD, we may need to reconsider our stance.
Note
We still have our limit order in place for Tencent Holdings, as there remains a possibility of further price declines. This is based on a potential secondary scenario where we might see prices moving into the area of Wave ((i)), which is at the 315 HKD level. If prices exceed this level, it would invalidate our current analysis, indicating that we had already completed Wave (2) where our Wave ((iii)) marker currently stands, and we would then be in a bullish trend. Until such a development occurs, we continue to expect our limit order at 246.58 HKD to be executed. Should this not happen, we'll need to adjust our strategy accordingly.
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