If this last line of defence is also taken out by this week, then we can see the price possibly heading further south towards 120 level (though I think is quite unlikely).
From its peak at 453.70, we have witnessed how this stock tumbled down almost 60% to its current price of 194.
Please do not ask me should you sell or buy as I do not know your objectives nor strategy. As a long term investor, I am thrilled for 2 reasons. One, the central government moves seen by many global investors as a hard hit is really not in the eyes of the middle income people in China. The severe downfall of the Education sector was a crude wake up call to many other players who wondered when will the next industry be hit ? So , panic selling and fearmongers are spreading rumours to encourage weak hearted traders to let go of their shares.
Of course, the weak companies will suffer as we see these tuition operators that make millions and billions are now worth much lesser of its valuations than its glory days. The entire business model - from profit to non-profit will affect the share price drastically!
However, the fundamentally strong companies , like Meituan will be able to withstand though it also has its fair share of whipping from the government. A more fairer wage model was proposed for the deliverymen, one that created millions of jobs including in the rural areas. The central government does not want capital growth at the expense of its people. We know how tough the job of these deliverymen are.
So. let the selling pressure quiets down a bit more and I will be watching like a hawk to average down. Do not copy my model if you are not sure what you are doing. Speak to your Adviser and get professional advice.
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Praise Lord, it is currently up 10% !!!
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If it clears the 240.5 and close with a bullish candle, I will load up more.