China tech etf (kweb) - hold or sell or buy dip? Down 40% from the peak!

I believe, everything about investment can boil down to 3 things- time horizons, investment strategy and decipline. As long as you are not levered and switching between strategies frequently, you will be fine.

For simplicity, lets take CQQQ and 200EMA to make a decision

If you are long term investor (take monthly or yearly chart), recent drawdown is just a glitch in the market. Its a good place to buy more assuming that it has more long term potential. Question is, are you ok of not getting compensated for holding them during drawdowns. Its a personal choice.

In a daily chart, its a sell signal. Its an opertunity for medium term investor to take profits and use that capital somewhere else for a better investment. However, you might miss some big long term gains.
Here is my personal view -

For me i have a mandate that all my buy holds must pay a decent dividend for me to hold them for long term. I believe thats how mean reversion works its wonders in the long run. So KWEB does not meet that criteria.

KWEB or tech in general are trending markets. As a macro trend follower, trend is my friend. I dont have a strong macro conviction to go long at this point. China tech has been decoupling from US tech sector. Chinese gov. is trying to stop market monopolization. They are playing the long term game. Unlike US, most of China's debt/GDP belongs to the coperate sector. In US, its government debt. Therefore, China has a highly levered economy. Currently, they are in deleveraging phase. So KWEB is just a watch for me. As a medium term trend follwer, i want to enter into a long trade when trend is going back up.

Recently, i saw a trade idea from Weston Nakamura from real vision exchange who expresses this US- China tech decouple using long QQQ and short CQQQ. When tech goes up QQQ will outperform CQQQ and when tech goes down CQQQ go down more than QQQ, which is directionally neutral.

Example- On 8th july, Being long QQQ outright would have you -1.5% , but with CQQQ -2.7%, the long QQQ / short CQQQ pair netted +1.2% in a down market.​​​

It largely depends on your allocation and outlook.

If nothing changes, I would hold if you can and ride it out.

If you're bullish on China's growth and still feel you have a rather low exposure to China's tech, can consider buying the dip.

I have yet to invest in China's stock market and considering to buy the recent dip.

All the best!

I like the diversification that holdong both US & HK etfs gives and I intend to add more on dips.

What's your investment thesis? Buy when it's rising, sell when dropping?

Has the fundamentals of underlying companies changed? Are they doing poorly? Missing earnings and guidance? Has the outlook of China's growth changed?

Looking at stock prices is not investing​​​