The Chinese markets have been the subject of much speculation as of late. Whether one wants to contemplate if GDP figures are accurate or if balance sheets can be correctly interpreted is one thing. The old adage goes “stocks don’t lie, people do”. Sure the FXI is lower by 29% off recent 52 week highs and quite frankly the chart has nothing that looks appealing to me. If one looks at select Chinese ADRs, one could become more sanguine. Below we look at a few examples exactly how they were highlighted recently in our daily reports.
In our Wednesday 11/25 Game Plan we looked at BIDU. This is known as the 800lb gorilla in the region, although with BABA’s emergence some may question it. It has clearly outperformed recently and we are big proponents of the round number theory and the precise intraday low from 8/24 was 100. The stock is up more than a double since and on 11/27 it bounced off the round 200 number and was up a combined 8% with the 11/30 session and the last 2 days were bullish tight inside days. The stock is UP more than 10 handles from the recommended entry. Here is how is was presented in our 11/25 Game Plan.
Stocks that can be bought as they retest prior breakout triggers are BIDU. BIDU is a Chinese internet play lower by 10% YTD and 16% over the last one year period. Its last earnings report was a welcome surprise higher by 10.9% as the prior 3 all slumped 15, 8.5 and 4.5% on 7/28, 4/30 and 2/12 (2/12 report found support at round 200 number). BIDU is higher 5 of the last 6 weeks and all 5 up weeks CLOSED right at the top of their weekly ranges and scored powerful gains between 4.4 and 18.9%. The stock took out a cup with handle trigger of 203.09 on 11/18 and enter here on a retest. One can add to above a double bottom trigger of 224.05 in a base that started almost exactly one year ago at all time higher at the round 250 handle.