JD.com: When “Bullish Fundamentals” Mean Exactly Squat
Here is the real reason for JD's August rally to all-time highs
by Nico Isaac
Updated: September 08, 2020
As China's largest online retailer, JD.com is rapidly becoming known as the Amazon of the East. Unfortunately, as a tradeable stock on the NASDAQ, JD often lives up to its name "Jingdong," which means "to alarm or startle" -- by catching investors by surprise with sudden, unforeseen moves.
Take the stock's recent performance. This chart of JD shows that, after trading sideways throughout all of July and into August, price broke out to the upside in a 23% rally to all-time highs on September 2.
According to the mainstream experts, JD's rally was sparked by two shockingly positive performance reports, released on August 13 and 17, which caught analysts off-guard:
Wrote one August 13 Business Insider "JD.com Soars After Reporting Surprise Profit."
Another August 19 Seeking Alpha described JD's 34% increase in year-over-year revenue as "astonishing results without blemishes."
And a third August 17 Yahoo! Finance told of the company's "better-than-expected" quarterly sales, its fastest quarterly gain since 2018.
But the fact is, while many didn't see JD's supposed news-fueled rally coming until after it happened, the bull thesis on JD.com was confirmed long BEFORE the news.
More so, its subsequent rally to record highs wasn't caused by fundamentals, as astonishingly unblemished as they were. It was driven by the stock's Elliott wave pattern, which foresaw a record-breaking surge days before the "bullish" news -- on August 5.
Here, in our August 5 Trader's Classroom, editor Jeffrey Kennedy presented this wave labeled chart of JD. It identified the July consolidation as a wave 4 of a 5-wave impulse underway since March.
This set the stage for a powerful wave 5 rally to $74-$79 per share.
The stock's subsequent 23% rally to record highs in August followed on cue -- before its fundamental backdrop was hit with several "bullish surprises."
When it comes to identifying high-confidence setups in the world's most heavily watched ticker symbols, the key is anticipation -- not affirmation of trend changes after the fact.
Find out what stocks are on Trader's Classroom's "watchlist" today, so you can be one step ahead of the changes to come tomorrow.
See below for details on how to subscribe to our independent, action-oriented Trader's Classroom.
3 Steps. 30 Days.
Your Accelerated Track to Better Trading.
You know that beating the markets is hard. We get it. And we can help.
With our "30 Days to Better Trading" Plan, in just 30 days, you'll learn to spot true Elliott setups. So you can skip the "maybes" or "hopefuls" and commit your risk capital to high-confidence moves instead.
Imagine the change this could make for your trading account.
Your "30 Days to Better Trading" Plan:
Start Seeing Real Opportunities Clearly
We've put together this risk-free 30-day plan to give you all the tools you need to spot the real trading opportunities FAST. During this track, you'll engage multiple, important learning steps at the same time. Studies show this combination of 1. Understanding/trigger, 2. Action, 3. Reward is the most effective way for people to quickly adopt a new process.
As train conductors of yesteryear used to say, “ALL aboard!” That’s a useful announcement for passengers, but not so much for investors. For example, consider investor sentiment toward gold. This chart shows you.
Some say, Bitcoin and the S&P 500 are joined at the hip. Some say, Bitcoin and U.S. dollar are inversely correlated. Some say… well, watch what the editor of our Crypto Pro Service thinks about all that first.
This year, everyone from retirees to generation Z's have turned to online trading in hopes of earning money amidst economic uncertainty. But all too often, new traders focus too much on chasing opportunities at the expense of managing risk. Elliott Wave International's on-demand webinar -- "Introduction to Spotting Elliott Wave Trading Opportunities" can help you fill in this important gap. (FREE; $129 value)