Chartist Who Called Tencent Rout Says China Rally Just Starting
- H-shares may rise past 11,000, Bernstein's Nagaraj says
- Said last April Tencent would drop 20%; shares fell 16%
Back in April last year, Ayush Nagaraj looked at the charts and said Tencent Holdings Ltd. was poised to plunge. It did. Now he’s making a new call: the rebound in China stocks in Hong Kong has room to run.
The Hang Seng China Enterprises Index will rise 6.9 percent from Thursday’s close to at least 11,000 after forming a pattern known as a double bottom, said Nagaraj, a sales trader and chartered market technician at Sanford C. Bernstein & Co. This shows a drop, a rebound and then another slump approaching the previous low, usually signaling shares are poised to climb. The Hong-Kong based chartist said at the start of April 2014 that Tencent was set to tumble 20 percent in six weeks; by May 8 that year the Internet company had dropped 16 percent.