Fresh Buying Fuels Surge in Chinese Tech Stocks

The recent surge in Chinese tech stocks, as evidenced by the Hang Seng Tech Index`s substantial rise, is primarily driven by new investments rather than short covering. Analysis of short positions in major companies like Alibaba, JD.com, and Baidu reveals minimal change, indicating that bearish investors haven`t been forced out. While short sellers have experienced losses, they haven`t rushed to cover their positions yet. However, if the rally persists, significant short covering could amplify the upward price movement. Despite facing challenges in recent years due to economic slowdown, regulatory measures, and intense competition, the recent government stimulus and positive market sentiment have fueled a buying spree, leading to some of the best trading days for these companies in years.