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BEKE - China's Housing Recovery

September 26, 2024

To wit, BABA will end today doing 6-7x its normal volume, relative to ADV, BILI 5x, TCOM 6x, JD 5x. The weight of evidence suggests this buying power is NOT EXHAUSTED, but instead is powering up.

This brings us to our favorite China name near-term, BEKE.

Ke Holdings Inc. (BEKE) is the premier online platform for all housing related services in China. The company has done a great job of diversifying into a jack of all trades for China's housing market.

BEKE is not just levered to new and existing homes, but as you will see, the company has diversified into ancillary services such as Home Renovation, Furnishings and Home Rentals too. See our Q2 Notes below.

We think there are 80% odds BEKE has enough power to move to $22.50-$25 into the US Election.

It is on pace to do 7-9x Average Volume today, relative to its ADV.

Most importantly, $20 is a huge level. This box formation is super powerful. We think it runs to $22.50-$25 over the next 4 weeks once we close ABOVE $20. Quite the base here on the weekly chart, a powerful Darvas Box Pattern.

BEKE 4-YEAR WEEKLY

BEKEchart.png
Source: StockCharts.com

Stop Loss:  We will stop out $18.50, in deference to risk, especially with it being a China play.

CONSENSUS ESTIMATES

Source: TIKR.com

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Disclosure:   We are long BEKE stock. We may change our positioning at a moment’s notice, without notifying you of any such moves.

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In no shape or manner should the views expressed in this piece be considered investment advice. We reserve the right to change our positioning in our BEKE stock and options positions at a moment’s notice without updating you on any such change in opinion and positioning. That may be tomorrow, even before our price target is hit. Facts change, our opinions can change quickly too.

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