China’s stock market went into its “Year of the Dragon” celebrations with a rare and much-needed bounce, with the index, ahead of last week’s break, up +8.3% from its 5-year low. However, it would be easy for the bears to justify the gains on simple book-squaring ahead of the long break. Still, at MM, we can see something more meaningful brewing beneath the surface, i.e. Chinese stocks are looking for a low after almost halving over the last two years. While there are no concrete fundamental or technical buy signals in place, we continue to believe a ~20% bounce, at the very least, is close at hand.
