Chinese Stocks Look Strong as Market Bounce Inspires Little Confidence

Here are some names I'm eyeing and one electric auto company that's poised to 'charge' ahead.

After a little hesitation, the market is picking up where it left off on Friday with some more bounce action. The Nasdaq 100 is leading the charge with positive breadth of 9 to 1. The Russell 2000 is up 0.9%.

There has been a series of 1% intraday drops over the last couple of weeks, and it wouldn’t be a surprise to see that again. There have not been any trend-up days in a while, which is a function of uncertainty and higher volatility.

I’m primarily focused on stocks that have good relative strength right now. Quantum computing names are doing very well right now, and I’ll look at those later.

Despite the recent market woes, over 100 names have been making new 12-month highs. One group in particular that has done wall are China-related names such as ACM Research ACMR, Alibaba BABA, Zai Lab ZLAB, Atour Lifestyle ATAT, and JD.com JD.

I am taking a closer look at China name Zeekr Intelligent Technology Holding Ltd. (ZK). ZK is a "battery electric vehicle" — or BEV — company operating in China. ZK is a subsidiary of China-based Greely, which is the tenth-largest auto manufacturer in the world and the second largest in China.

Zeekr was founded in 2021. Its name is a combination of the words "Generation Z" and "geek." It manufactures premium vehicles and has a strategic partnership with Waymo for self-driving cars and robotaxis.

On March 11, ZK announced new luxury models that compete with Mercedes-Benz and BMW. The Zeekr 9x Grand SUV is priced at about $137,840. Other variants at lower price points were also introduced.

The big long-term potential is for entry into the U.S. market, and even with tariffs, it has the capacity to be very price competitive. That will not happen soon, but the company is enjoying very strong revenue growth in its home market and is expanding internationally.

The main appeal of the stock at this time is its strong relative strength. China stocks, in general, have been outperforming and ZK enjoys a relative strength ranking of 95.

Technically, the stock is in very good shape as it flirts with a breakout over the $32 level. It may need time for further consolidation. I’ll be watching for increased volume and a move through that level before being more aggressive.

My confidence in the market in the short term is weak, but I’ll be watching for names that are bucking the trend.

At the time of publication, DePorre was long ATAT, ACMR.