Tencent (700:HK): Distribution Phase in Progress
Tencent is well-receive by investors, analyst and fund managers. Following table shows the strong convictions by most analysts on Tencent. Source: Reuters.
Tencent is relatively weaker than market as shown in our proprietary RS indicator. Fund Flow Index (FFI), which indicates fund flow is below zero, meaning flows are flowing out of Tencent. Lastly MACD continues to trade in bullish manner.
Thus, we are expecting Tencent to breaks further with first objective at HK$340-350 zone.
Trading is no different to any other merchandising business as shared by Mr Wyckoff, we all reads the demand and supply conditions and react accordingly.
Distribution zone is simply a zone where demand diminishes and overtaken by Supply. By learning to identify these characteristics, it helps traders to understand the situation and trades in harmony with the markets.
I always remind myself that I'm not trading the stock, but trading the demand and supply of the stock.