3SOF

A little bit of volume and XING gets excited. Another touch on that resistance zone (red line weekly chart) that has proven to be such a tough area to hold on to. Over the coming weeks I think that zone will become history.
Good Trading

I fully expect XING to report a blowout Q2 in the next couple weeks or so. But, now I also expect the market to sell the news regardless of the news, it just seems that is the market right now. Sure I hope XING will be different, but based on recent events that hope on a risk reward level is losing it's lustre. So I have to change my trading plan some to protect myself. I'm moving my stop just below the 50sma which currently sits just above $10. If it violates then I'll look for support for accumulation again maybe down in the low $9 zone.
If I had 6.66% of my capital in XING (like 3SoF) I would keep a much looser stop still, but my position is a lot bigger than that and hence my reasoning  (combined with current market sentiment).
Good Trading

Some questions about the trading plan for XING:

We took position at >$7 and now >$10.00

I don't know why the stop loss order is $6.80. We have >30% profit already and should move the stop loss order higher to protect the profit, not tuning a profit into a loss.

Just my opinion.

XING finding nice support from the 50sma and short term ascending support line (which coincides with the 50sma zone).
XING has very low institutional holdings, but interestingly 3 insti's took positions reported for end June:

Goldman Sachs 211K shares. This is the first time Goldman has bought XING shares in a long time and it is rumoured they are part of the CECT IPO planning.
UBS Added 71K shares to bring their holding to 84K total
MILLENIUM MANAGEMENT Added 68K shares to bring their holding to 87K

There was also some smaller insti buys from Reynolds Capital and Wolverine Asset which offset small sales by Merril Lynch and Bank of NY (Hey maybe Merril sold because the aren't in the CECT play 

Insti holding now stands at 4.8%.

Also the Wu family bought shares Rui Lin added 245K, Zhi Yang added 150K (obviously they know whats going on in XING 

Link for that info: http://www.adr.com/adr?page=sum&formtype=1&site=ADR&ticker=xing

Speculation I know, but for sure  Goldman will have the inside track on XING's Q2 number and forward pland, so this can only be positive.
My only concern remains that is it is such a bad market for anyone with decent news. That however is in the hands of Mr Market, nothing I can do about that except protect my investment as best as possible:

Link for Insti holdings: http://www.nasdaq.com/asp/holdings.asp?mode=&kind=&symbol=xing&symbol=GIGM&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&symbol=&FormType=Institutional&mkttype=&pathname=&page=holdings&selected=XING

Quote from: shawFund on August 10, 2006, 07:45:49 PM
Some questions about the trading plan for XING:

We took position at >$7 and now >$10.00

I don't know why the stop loss order is $6.80. We have >30% profit already and should move the stop loss order higher to protect the profit, not tuning a profit into a loss.

Just my opinion.

Hi Shawfund,

I have to say that I am not in a hurry to revise the stop. XING has repeatedly shown that having a tight stop is not the best way to play this stock.

Look what happened in the middle of June when the stock dropped with 20% over two trading days just to reverse with a 50% increase over the following 5 trading days. Even though XING has shown remarkable strength in the absence of any news the last couple of weeks it is still a very volatile stock.

When that is said there might be room for increasing the stop above our entry price. The first strong support is around 8.5 so a stop just below that seems to be a wise for those who are not comfortable with the loose stop we have on XING. This stop will still leave room for some wild swings 

Welcome back Michael.

Institution watch (read my previous post for initial detail):

MORGAN STANLEY added 224K shares, total holding now 307K
HIGHBRIDGE Cap new position 49K shares
CREDIT SUISSE added 31K shares holding now 46K
BEAR STEARNS new position 24K shares
There were other small positions taken by other organisations also.

TIGER GLOBAL sold out their position 399K shares

Some big names there taking positions prior to:

1) Q2 Earnings
2) CECT IPO
3) Potential other IPO

Good Trading

 

Qiao Xing Universal Telephone, Inc. Provides Estimates of Certain Key Financial Data for the Second Quarter of 2006 Ahead of the Release of Half-year Financial Statements
Monday August 21, 8:30 am ET

HUIZHOU, Guangdong, China, Aug. 21 /Xinhua-PRNewswire/ -- Qiao Xing Universal Telephone, Inc. (Nasdaq: XING - News) today provides an estimate, on an un-audited management account basis, of certain key financial data for the second quarter of 2006 ahead of the release of half-yearly financial statements.

Net sales for the second quarter of 2006 for XING are estimated to increase 36% from the same period a year earlier to RMB 770.9 million (US$ 96.4 million). The increase is mainly the result of strong growth momentum in ''CECT'' brand mobile phone handsets. According to the survey of SINO Market, in the second quarter of 2006, the ''CECT'' brand moved up one place further in the league table of market share to rank fourth among local players in the mobile phone handset market in China. A number of new models of high-end mobile phones with sophisticated functionalities and distinctive features were launched at competitive prices. Also, there was a higher proportion of higher-end products in the sales mix.

The Company estimates gross profit for the second quarter of 2006 for XING to increase 90% from the same period a year earlier to RMB 142.4 million (US$ 17.8 million). The increase mainly came from the ''CECT'' brand mobile phone handsets. A premium product mix enabled generation of higher gross profit margins. In addition, cost-saving measures in procurement and sub-contracting continued to produce results to bring down the cost of goods sold.

Operating expenses for the second quarter of 2006 for XING are estimated to increase 25% from the same period a year earlier to RMB 39.4 million (US$ 4.9 million), which was in line with the increase in net sales.

Income from operations (before other income/expenses, interest, tax and minority interests) for the second quarter of 2006 for XING is estimated to increase 136% from the same period a year earlier to reach RMB 103.0 million (US$ 12.9 million).

Mr. Wu Rui Lin, Chairman of XING, said, ''We are pleased to bring to you these estimates of key financial data for the second quarter of 2006. They are highly satisfactory and indicate that the fundamentals of XING's operations are sound. We maintain our forecast for XING that net sales would grow 30% compared with 2005, and that net income would grow at an average yearly rate of 35% in the medium term.

''XING's consolidated balance sheet as at June 30, 2006 and income statement including information about earnings per share for the six months ended June 30, 2006 are currently under preparation and will be released in several weeks.''

Nice guide on the Q2 earnings, but as with all things XING they kinda leave the door open a bit to  not quite deliver true breakout news. Namely the quote ''XING's consolidated balance sheet as at June 30, 2006 and income statement including information about earnings per share for the six months ended June 30, 2006 are currently under preparation and will be released in several weeks.'' Just too open ended for a nervous market looking to reward.
Anyway that said, technically todays action was pre market hype running up to the highs followed by market hours consolidation and a close near the low. Volume was good. Daily chart now has a $0.35c gap which more than likely will fill before the price can consolidate and move up some. Looks simmilar to the June 20th black candle gap up (after the 2005 results announced). That gap filled next day and then reversed back up to set new 52 week highs 4 days later at $12.94.
I hope they perhaps have some news in the next days regarding IPO to help keep the momentum going, because otherwise that 'several weeks' statement may act as a bit of a heavy drag net.
Anyway I like my long term chart which shows the price sitting just on top of that multi tested resistance line, lets see if it can hold as support.

A new analyst's report, target price of $17.44!! 

http://biz.yahoo.com/bw/060830/20060830005605.html?.v=1

For those interested here is the Dutton report .pdf http://www.jmdutton.com/research/xing/reports/xing_report_083006.pdf

Just so all know Dutton do receive payment from XING for the analysis and report and they have been engaged by XING since 2005. That's OK as they provide a comprehensive analysis and summary of XING business both historical and forward looking which will help the investment community access data on XING. But this is not an insititution initiating cooverage and that is a big difference.
Anyway the report basically pulls together everything that is known about XING and nicely presents an undervalued stock in a high growth arena, gaining market share with leading and innovative products (most of which we know really) and sets a strong buy rating with target $17.44. Which is not unrealistic based on the known financials and guidance.

One VERY interesting point raised is the summary quoshing of a CECT IPO. Xing management say 'the CECT IPO is merely rumors'  although they 'do not rule out the possibility of a listing'
Now that means that all the press discussion and seemingly quotes from XING on the IPO were either false or purely theoretical discussions which were reported as fact or even perhaps a way of XING management floating the concept out to the market and then deciding for whatever reason not to execute it further.Whichever it takes away a stock price moving catalyst that part of my investment in XING was geared upon.

Summary for me: The report will get more people interested, the target price is not unrealistic, the CECT IPO removes a price enhancing catalyst that speculators like to work on.

Institutions are taking positions in XING, but not it seems because of an upcoming IPO. So we are back to the fact that XING is undervalued and somewhat untrusted by the investment community (due to historical issues) and that really is the same situation as it was before.

I think I will be selling positions into upcoming strength (not all my holding), not because I have gone bearish on XING, but really to reduce my exposure because CECT IPO was a part of my reasoning for investment.

Good Trading

I have lowered my XING exposure. Technically I quite like the current look of the chart, but with XING.....you just never know

Interesting shakeout over the past few sessions. A retest of the 50sma on low volume and then a bounce to the upper descending line. As my notes said I had a stop at $10.70, but didn't sell as volume was low and I suspected this was just a retest of support before a new upward move. Todays close  near the high and right on the descending line of resistance. I expect to see the 1H results out next week.

Another good session for XING closing above the descending resistance and stopping at previous spike high points. Volume is OK but not decisive. Interestingly Sept options expire this Saturday and the XING $12.50 calls have a high open interest 7,088 contracts (2 to 1 relative to the same strike Puts). I can't help thinking that the price action is related to the $12.50 strike price, that is a lot of calls written which with the past 2 sessions reversing what would be nice gains (for writers) into potentially losses. I have some Sept $12.50 calls (they have currently nominal value $0.05c, but won't if $12.50 goes, so will see how Friday session plays out.

XING doing very nicely, volume is building and the rise is controlled rather than gappy and erratic, which adds strength to the underlying support.
As usual when stocks get a nice move underway rumours start to circulate to try and add fuel / justify the action. The latest XING rumour being they might be acquired by TCL (larger Chinese telecom competitor). Who knows, anyway regardless it doesn't affect my trading plan.
Charts looking strong, my long term chart shows the relative position of XING now working its way through historical resistance zone.
Good Trading

New breakout to 52 week high. XING is behaving very nicely and showing excellent strengh. The breakout above $13 is a significant move. I have shortened the time frame of the long term chart to display the importance of where XING sits now.