China's Tencent Holding (TCEHY) Coiled For Big Move

Shares of Tencent (TCEHY) have bullish signals on the stock chart. After making a multi-year low in 2022, the stock has chopped sideways as China's economy has struggled.

However, technical analysis may be telling investors it is time to buy. Tencent has been putting in a bull flag for the last six months. Once it breaks out of this flag pattern at $48, Tencent needs to get through its final level of resistance at $52. Once completed, it could trade higher for years to come, potentially making its way back to the $100, all time highs.

Some investors will argue that the Chinese economy is in a recession. While they are correct, smart investors realize that you always buy stocks when they are beaten down during a recession. Once the recession is officially over, stocks are usually far too high to chase.

While China comes with risks, the rewards look much better than any U.S. mega cap technology stock. Price-to-earnings ratios for Chinese tech stocks are hovering around 8 vs mega cap tech at 30.

Watch the bull flag, the breakout should begin within weeks.