To The Moon

JD.com $JD-SW(09618)$ has seen an impressive 20% price surge over the past five days, driven by a combination of positive developments, including a rating upgrade, a higher price target from Jefferies Group, and strategic initiatives like its new aquaculture project and app features. This rally has sparked interest among investors, raising the question of whether the stock still holds further upside potential.

Recent news in JD.com

• JD.com received a rating upgrade from Jefferies Group last week, driven by its strong Q4 performance. Jefferies also increased its price target for the company by 33%, raising it from $45 to $60.

• In other developments, JD.com partnered with a government-operated technology firm to establish an aquaculture farm in Guangdong province. Named the Jingdong Intelligent Fishery Industry Park, the project aims to achieve a 2025 output of 5,000 metric tons, valued at $60.2 million, with projected profits of $19.6 million.

• Additionally, JD.com introduced a new gifting feature on its mobile app, enabling users to purchase and send products to others directly.

Technical analysis of JD.com

Based on the chart:

• Bullish Divergence (MACD): The MACD indicator shows a bullish divergence, with the MACD line making higher lows while the price was making lower lows. This is a strong reversal signal, suggesting increased bullish momentum in the stock.

• Gap Formation: A significant price gap is observed between 148 and 152, highlighting strong buying pressure and a potential shift in sentiment. Gaps often act as support or resistance zones, so the 148-152 level may serve as a key support if the price pulls back.

• Current Price Action: The price has surged past the gap, reinforcing the strength of the bullish divergence. If momentum continues, the next resistance level to watch could be around 161 or higher.

Using DLCs for short-term trading

Traders can use Daily Leverage Certificates (DLCs) for short-term trading on JD.com to amplify potential returns while managing risk.

For bullish opportunities, such as the current uptrend supported by the MACD bullish divergence and gap breakout, traders can use long DLCs (e.g $JD 5xLongSG251113(DWYW.SI)$ ) to capitalize on upward momentum.

Conversely, if the price approaches resistance or shows signs of reversal, short DLCs ( $JD 5xShortSG260513(ULBW.SI)$ can be employed to profit from pullbacks.

Given the leverage effect, DLCs are ideal for capturing quick price movements, but traders must monitor positions closely to mitigate the higher risk associated with leveraged products.

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Disclaimer: 

This document is not an offer or solicitation to buy or sell, nor financial advice or recommendation for any investment product. This document has been published for general circulation only. 

This advertisement has not been reviewed by the Monetary Authority of Singapore. This post is sponsored by Societe Generale, Singapore Branch. The content of this article does not form part of any offer or invitation to buy or sell any daily leverage certificates (the “DLCs”), and nothing herein should be considered as financial advice or recommendation. The price may rise and fall in value rapidly and holders may lose all of their investment. Any past performance is not indicative of future performance. Investments in DLCs carry significant risks, please see dlc.socgen.com for further information and relevant risks. The DLCs are for specified investment products (SIP) qualified investors only.