Chinese stocks made a comeback Monday, alongside U.S. markets, but the rebound came after a far worse sell-off.

The FXI China large-cap ETF has fallen 30% from a February peak, while the U.S.-dominated S&P 500 has slipped just 3% from its own high, set in November. The KWEB China internet ETF, which holds Alibaba, among others, is down 61%.

These stocks have come under pressure this year both as the U.S. increases regulatory scrutiny on China-based securities listed on domestic exchanges and Beijing enforces its own crackdown on domestic industries ranging from technology to private education.

Craig Johnson, chief market technician at Piper Sandler, says investors tempted by a potential bargain ought to look elsewhere.

"The chart says it all," Johnson told CNBC's "Trading Nation" on Friday. "It just purely looks like people are trying to catch a falling knife. You're making five-year new lows in here on the BKCN [S&P/BNY Mellon China ADR index]."

"If you drill down now looking at the Alibaba chart, that's 10% of that particular index, there is no indication we're getting anywhere close to making a bottom," Johnson added. "The evidence at this point in time says pass on this and wait for clear evidence that a bottom is getting set."

Alibaba rallied 10% on Monday, its best one-day gain since mid-2017, after the China Securities Regulatory Commission said it had not encouraged any U.S.-listed Chinese companies to delist. The e-commerce giant also announced an organization and management shakeup overnight.

Eva Ados, chief investment strategist at ERShares, is also avoiding the group. She says the firm has completely eliminated its exposure to China.

"Over the last year or more, we have seen a series of unpredictable news announcements that have been detrimental to Chinese investments, especially ADRs," Ados said during the same interview, referring to the Chinese government's increasing regulations on the corporate sector.

Adding to Ados' concerns was the announcement Friday by China-based ride-hailing company Didi that it would delist from the NYSE and pursue a listing in Hong Kong instead.

"That's just another reminder that the regulatory risks associated with them exceed and are overweight any potential benefits that you can have with their growth names," she said.

Disclaimer