Cloud computing is one of the sectors that have vastly outperformed the marketplace since the March 2020 low. NetEase Inc is in the cloud computing business, focused on community, communications, commerce and video games. Lets take a more detailed look at their operations:
“NetEase, Inc. is a Chinese Internet technology company providing online services centered on content, community, communications and commerce. The company was founded in 1997 by Ding Lei. NetEase develops and operates online PC and mobile games, advertising services, email services and e-commerce platforms in China. It is one of the largest Internet and video game companies in the world. The company also owns several pig farms.
Some of NetEase’s games include the Westward Journey series (Fantasy Westward Journey, Westward Journey Online II, Fantasy Westward Journey II, and New Westward Journey Online II), as well as other games, such as Tianxia III, Heroes of Tang Dynasty Zero and Ghost II. NetEase also partners with Blizzard Entertainment to operate local versions of Warcraft III, World of Warcraft, Hearthstone, StarCraft II, Diablo III: Reaper of Souls, Overwatch in China, the RPG game Onmyoji, and the Onmyoji Arena MOBA. They are also developing their first self-developed VR multiplayer online game with an open world setting, which is called Nostos.”
NetEase is counting clean off the March 2020 all time low low, lets take a look at the 4H chart below.
NetEase Weekly Elliott Wave View:
On a Weekly Time Frame. From the all time lows, NetEase has a great looking structure that favours further extension higher in the future. There is a clear 5 waves structure leading into the 2017 high labeled Blue (I). This high was struck at 377.62 in December 2017. After that, a multi month correction took place for blue (II). That low was struck at 183.90 in September of 2018. From there NetEase formed a series of nesting ((1))-((2)) and Red 1-2, leading into the recent peak. Lets zoom in a bit and take a look at the daily chart from those Blue (II) lows.
NetEase Daily Elliott Wave View:
On a daily view, NetEase shows a series of nests with Black ((1)) and ((2)) set, and Red 1 and 2 set. Red 2 bottomed at the March 2020 low. After that, Red 3 has formed an impulse into the recent peak that was seen on August 24th, at 517.65. Currently, prices are favoured to be pulling back in Red 4, which is presently favoured as a buying opportunity. There is a blue box extreme area where buyers may show up for a bounce in 3 waves at least in Red 4. This runs from 418.46 to 380.04. There is an incomplete bullish sequence to the upside, which favours more upside in the future.
In conclusion, Red 3 is favoured to be set, with Red 4 ongoing. The blue box price area may change if NetEase manages to get a bigger bounce before moving down. But for now, that blue box remains the area where buyers may show up for a bounce in 3 waves at least.
Risk Management
Using proper risk management is absolutely essential when trading or investing in a volatile stocks. Elliott Wave counts can evolve quickly, be sure to have your stops in and define your risk when trading.
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