The Great Chinese Stock Rally of 2024 seemed as if it had run its course by Thursday afternoon. Nevertheless, the big pops in prices of equities across that economy still left them in positive territory when compared to their levels at last Friday's market close.

Investors piled into every conceivable sector, so we could have thrown a dart at a board full of U.S.-listed Chinese titles and hit all winners. According to data compiled by S&P Global Market Intelligence, Bilibili (NASDAQ: BILI) was up by 18% week to date as of Thursday night. Tencent Music Entertainment Group (NYSE: TME) and Studio City International Holdings (NYSE: MSC) rose respectively by 10% and 11.6%. Crushing them all was Up Fintech Holding (NASDAQ: TIGR), which surged more than 100% higher.

What comes up must come down

The origin of the rally was the Chinese government's unveiling of its latest economic stimulus package, aimed at getting the massive yet lumbering economy on a more pronounced growth trajectory. At the same time, the authorities signaled hope for improvement in sluggish and frequently controversial corners of the economy, such as real estate and financial services; they announced direct material assistance for both of those industries (cue the double-and-then-some price pop of Up Fintech).

Yet a stimulus package, even one of the huge-scale ones favored by the Chinese powers that be, has its limits. This one has only been announced and has not been implemented. And although it's sure to help the domestic economy to some degree, it isn't some cure-all that's going to instantly lift it out of the doldrums. Beijing is talking the talk with its business booster; we'll see if it can walk the walk effectively.

Robust rallies also have a way of bringing out the profit-takers and the short-term speculators (which are frequently one and the same). That's especially true in this instance, when a wide variety of stocks had been ignored and sitting at depressed prices for quite some time and were suddenly jolted alive by the stimulus adrenaline shot. It's tempting for every investor to lock in a double- or even triple-digit profit for a mere few days of holding a stock. Such sell-offs helped bring about the fairly sudden reversal in prices on Thursday.

Don't count them out just yet

I don't think we've seen the last of the price pops. Rather, Thursday's correction feels to me more of a breather as market players contemplate their next move. It's going to take some time to implement the full stack of measures announced by the government, and it will still take longer to properly gauge their effects. In the meantime, investors will be jostling to place bets on the stocks best positioned to benefit from that energizing top-down injection of rocket fuel.