At this obscure opportune moment

Tian Xuan Zhou (Oliver)
Bachelors Student, New European College – Munich

Opportunity often rises during market turmoil. The biggest concern is a prolonged conflict with Iran and by the looks of it, this might be exactly what we may be getting.

Last week was one of my best navigated weeks around the markets in my opinion.

Japan

Should have taken out exposure early last week already, if you haven’t, unfortunate. Perspective is really important, a 12% circuit breaker in Korea’s KOSPI followed by a 12% gain the following day is not the same. Korea will launch a 100 trillion Won market stable program if needed to stabilise.

I thought the huge sell volume at the opening and closings of Thursday and Fridays should be very telling. Nikkei should be more obvious. A very undecided candle saw it finishing below Wednesday’s highs.

This is very much event driven, as the blockade of the Strait of Hormuz stops the transport of roughly one-fifth of the world’s oil supply, which mainly goes to east Asia countries such as Japan and Korea. Investors are now increasingly worried about a global energy crisis. Very interesting, does this now force the hand of Japan and Korea to find other sources of oil and energy? Although unlikely, does China come into play somehow?

I think the Monday downward pressure will be huge and overstated. Korea and Japan still have some of the largest oil reserve stock in the world. Unless this somehow turns into another Ukraine Russian war, a prolonged grimy conflict. If institutions recognise this, volume should remain weak, and weaker as the trading day develops on Monday, the closing hour and closing volume should be important to see what the big boys think. Maybe buying back into the names from before on Tuesday or during the week.

HK/CN

As for China, I think this is where the bulk of opportunity is. The oil and energy problem should not affect China as much. It must be nice being the world’s largest energy producer. Furthermore, they are allegedly “buying” oil from Russia, with the US waiver on Russian oil sanctions to India, just buy more.

Economic data shows signs of recovery. Consumer price index came in at 1.8%, this is a three year high, this suggests strong spending during the Lunar New Year holiday. Buying into results for Q1 of 2026 is an idea, names that come to mind are maybe Anta Sports 2020HK and Li Ning 2331HK. Institutions are heavily buying into this at the end of February.

To further bolster consumer spending, Chinese officials allocated 250 billion RMB for this year’s fiscal budget to subsidise the trade in program alongside a 100 billion RMB government fund to support private investment and consumer spending. With the weakness of Asia markets on Monday, buying back into the home appliance names, especially TCL 1070HK, held up really well last week.

Cathay Pacific 0293HK. Hit my stop loss, still think its a good trade idea, especially after Monday. Sure they are affected, no more flights to the middle east and longer routes but not as much as people think they are. Airlines hedge against fuel price increases by buying futures and options, for Cathay specifically will cover around 30% of costs until the second quarter of 2026. So short term impact is limited, but as I have mentioned at the start, a prolonged conflict will be bad.

ENN Energy Holdings 2688HK. Really good price on Monday last week. Oil price effect should be very limited, if any higher oil prices can push gas prices higher. If that’s the case should outperform, onshore oil companies are already outperformers during this crisis. Holding.

Xiaomi 1810HK. Holding up really well against my bottom range at 32 HKD per share, I can only imagine shorts that made money may be profit taking. Since short interest is still rather high, a squeeze may flip the script. This is also off the back of the consumer price index reading and the announcement of the trade in program, keep holding.

If China comes into play, onshore Chinese oil companies such as CNOOC or Sinopec, which has already seen a big jump this Monday opening but has been brought down, becomes an idea, if so now is the time to enter, certainly an idea but I think no very good.

US

Great sets of trades throughout the week, buying into names that have seen huge declines YTD already, especially in AI and tech, and then profit taking late into the week. Really happy with US market trades last week.

Economic data is coming into play this week, could’ve been the main drive of the decline last Friday. Last Friday’s job reports came in at 4.4% unemployment, suggesting a worsen jobs market, but more importantly the inflation readings that will be released later this week. The fear will be a stagnation scenario, even a scare of stagnation, this may play out like the recession scare in 2024.

Adobe was one that I didn’t mention on last weeks thoughts, +9.44% last week. Perhaps treating this similar to Intel entering their earnings report on the 13th, should be profit taking a little bit throughout the week. Maybe buying back into this depending on their results.

Palantir Technologies. Best trade of the week by far, up as much as 20% last week, now trading up against the 50 MA as resistance, wicked through this mark on Friday but not enough. 160 should be another good marker, also profit taking a little this week.

Zscaler. Also profit taking this week, very similar if not the same with the two names mentioned above.

Lam research. Already profit took last week. Very limited exposure remaining.

As for Ideas for the week, not many unfortunately. Volatility is super high, VIX is +36% since Friday. Need to risk off, any ideas during this week will be in next weeks thoughts.