China's central bank has launched its most significant stimulus package since the COVID-19 pandemic, and Chinese stocks are starting to show signs that a long history of underperformance relative to Western equities may be behind them. If Chinese names continue, one name we'd like to focus on that has shown leadership is Tencent Holdings (TCEHY). Before we get further into the company's specifics, it's worth reiterating that Chinese stocks have consistently underperformed U.S. stocks since 2007. A deflationary sluggish economy. According to Chinese officials, the plan aims to return the economy to a growth rate of 5%. Looking at the weekly chart of the iShares China Large Cap ETF (FXI), we can see a break of the dotted blue trendline on above-average volume, as well as a turn higher in the S&P 500/FXI ratio (bottom panel). FXI's price is moving higher but does face resistance at the 200-week moving average as well as the 50% retracement level. If this move is sustainable, FIX should be able to continue breaking above the resistance zone in the $34 area. Turning to company focus Tencent Holdings (TCHEY) is a multinational technology conglomerate listed on the Hong Kong Stock Exchange since 2004. . Artificial intelligence projects called “LMMs” or “Large Scale Medical Models”, similar to LLMs, are driving the development of the healthcare industry. The $52-53 area should now act as support, with analysts expecting growth rates of 37%, 42%, 51% and 55% in the first four quarters. Rates will be more conservative and if Chinese stocks continue to improve on the back of central bank stimulus, we may see TCEHY hit the $75.00 target. I don't hold TCEHY yet in any portfolio at Inside Edge, but after a brief period of consolidation, I will be looking to establish a stop below the $52 breakout area. – Todd Gordon, founder of Inside Edge Capital, LLC, reveals: (Gordon does not own TCEHY in his wealth management firm, Inside Edge Capital. Chart shown is from MotiveWave.) All opinions expressed by CNBC Pro contributors are theirs alone , do not reflect the opinions of CNBC, NBC UNIVERSAL, its parent or affiliated companies and may have been previously disseminated by them on television, radio, online or other media. The above is subject to our Terms and Conditions and Privacy Policy. This content is for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to purchase any security or other financial asset. The content is general in nature and does not reflect any individual's unique personal circumstances. The above may not apply to your particular situation. Before making any financial decisions, you should strongly consider seeking advice from your own financial or investment advisor. Click here to view the complete disclaimer.