KraneShares CSI China Internet ETF is the IBD Stock Of The Day for Tuesday. KWEB, an ETF focused on top internet-related China tech stocks, jumped with other China shares on Tuesday after officials announced plans to lift coronavirus travel restrictions early next month.
Starting Jan. 8, China will end all quarantine requirements for Covid-19, including those for inbound visitors, foreigners and citizens, the Chinese National Health Commission announced Dec. 26. After three years of a strict "zero Covid" policy, authorities in China began dismantling the rules after widespread protests rocked the country in November.
Now, those traveling to China will only need a negative coronavirus test 48 hours before being allowed to enter the country, health officials say. And international travelers will no longer have to test upon arrival or undergo quarantine.
KraneShares' KWEB ETF specializes in China-based internet and internet-related tech stocks. Its top holdings include Tencent, Alibaba, JD.com and Pinduoduo. And it has $6.5 billion in assets under management as of Dec. 23, according to FactSet data.
KWEB: China Tech Stocks
KWEB is showing strength and holding short-term support at its 10-day moving average after skyrocketing 70% off its late-October low of 18.41. Shares reclaimed the 10-day and 21-day exponential moving average at the end of November.
The ETF is presenting a 32.08 buy point in a handle built on a five-month cup base. An aggressive early buy point could be charted at just above 31, on a down-sloping trendline in the handle. That would put the KWEB in a buy range — but investors are cautioned not to be opening new positions until the turbulent market improves.
Overall, KWEB is down about 13% in 2022 from its 36 level in early January. But its relative strength line is at a new high for the year. And KWEB has a 74 RS Rating, indicating it has outperformed about 75% of its market peers.
The ETF outpaced most tech stocks on Tuesday, gaining nearly 5% after officials announced the easing of Covid restrictions Monday night.
Meanwhile, China is facing another major coronavirus outbreak. Public health officials estimate 800 million people, or 60% of the population, could be infected in the next three months. World Health Organization officials say China's loosening Covid restrictions prior to the December holiday season was not the sauce for the new spike, which started in early November.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
