CHINA

[David Randolph]

The world is upside down. Back in the bubble days CHINA would go up thousands of percentage points just because of its name: chinadotcom Corp. Now it almost seems the stock has the plague. Just look at what this FOOL says:

«Mistake No. 3: Buying the hype
China is growing wildly and presents incredible opportunities. Satellite radio is the next mass communications medium. XM Satellite Radio (Nasdaq: XMSR) is a big player. The BlackBerry handheld is incredibly popular, and Research In Motion (RIMM) is one of the most innovative companies in the world. The Internet revolution will seem like a blip compared to what's going to happen with nanotechnology.

All that's true. But that doesn't mean you can simply buy Chinadotcom (Nasdaq: CHINA) because it has "China" and "dotcom" in its name and expect to make a fortune. Mighty Amazon.com (Nasdaq: AMZN) remains one of the most successful at cashing in on the Internet revolution. Yet investors who bought at the highs lost more than half their money.»

Let me try to explain my point of view. CHINA is down 96% from its peak and its name is still associated with hype and craziness of bullish investors. Investors have already payed for their mistakes of the bubble days (oh they sure did), there's no point in talking about the past all the time ... ChinadotCom is a name for a company like any. Except this one presents a great buying opportunity  

Taking a look at technicals on a semi-log chart:



Big volume, big breakout. It even had already made a successful retest of the broken trendline:



The stock was coming down because of a negative expectation for its earnings:

«Shares of CDC (CHINA:Nasdaq - commentary - research) were among technology's losers Thursday, falling 11.8% after the company posted a big drop in first-quarter earnings.

The company, formerly known as Chinadotcom, posted pro forma earnings of $1.2 million, or 1 cent a share, on sales of $56.2 million. One analyst had been looking for earnings of 3 cents a share on sales of $54 million, according to Thomson First Call. A year ago, the company reported pro forma earnings of $6 million, or 6 cents a share, on sales of $35.5 million. Shares traded down 34 cents to $2.55.»

Sales are growing rapidly and I believe that's far more important than earnings for an internet company. Like I said in the title of this post, I'm buying CHINA at tomorrow's open.

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[nofear]

people are starting to talk about you a lot:
http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=21750634&tid=china&sid=21750634&mid=109009

congrats on your excellent work !

[metro]

Here is the chart on CHINA from last week as it jumped over the 2.60 break point and to the 50-day and trend line at 2.84. Stock may go to 200-day EMA at about $4  as momo stocks have been hot and running above the bands. Still though pay attention to ones as they get so extended with RSI above 70 on 9-period and candle getting above the top Bollinger band.
http://tinyurl.com/az56h

[AussieTrader]

The action on CHINA has been fantastic and I know Metro bought this one before it made it's move so hats off to him. Look at the weekly chart and you can instantly see the huge vol increase and the potential upside. For me, target 1 just under $5, target 2 just under $6. Vol follow through will be key.

[stocktrader2619]

So Aussietrader, is it your feeling that CHINA will open higher today....??  That's the general consensus on the Yahoo message board, but, of course, there are a few naysayers who think it will plummet due to last week's rise.... Appreciate your comment NOT only about today's action, but also about 3-6 month out... THANK YOU VERY MUCH...!!!

[AussieTrader]

Well 2619!!, I don't know if it will open higher or lower to be honest, I don't really care too much at that micro level, however I do think it will go higher. I am more concerned with how it behaves relative to its current chart pattern. Fact is, it has huge momentum, it has 'limited' resistance on a relative vol basis above and the 200ema is a nice magnet above it, these all tell me it is more likely to go higher than lower overall. Flip side to all that is it is way overextended and people will start to take profits at some point.
I don't have a crystal ball, just a couple of charts.
Bonne chance.
Mike

[leighjam8]

Price and volume movement in the past 4 days bode exceptionally well. More then one third of the entire market cap thru the market with two big up days on huge vol and two profit taking down days on quarter the up day vol.

Looks good and I cannot predict support and resistance under such conditions....no one can....all I can say is when you take away the longer term founding holders who dont trade then someone else has bought into this story BIG time

Should go north no probs

[David Randolph]

1 up with big volume, 1 down with low volume. 1 up with big volume, 1 down with low volume. 1 up with big volume? I guess so, we'll see.

[David Randolph]

What a strange candlestick pattern on CHINA. The stock opened sharply higher and then came down to fill the gap. This is not the same pattern on IIJI, which was a meeting lines pattern because yesterday's candle wasn't white, but red. But the same psychology applies - gap up and  correction to fill the gap. The close of the gap provided support for the short term, so bulls seem to be in control of the stock.

[seadog]

Can you suggest if this is a good entry point 3.37

[David Randolph]

CHINA is consolidating the bullish move before another leg up. Any price is a good entry price now I believe.

[seadog]

I am in at 3.27
Hope it goes up.

[David Randolph]

CHINA is having a strange behavior. As a rule one shouldn't like this three black crows candlestick pattern (3 consecutive days with the close much below the open).

I'll tell you what CHINA needs to push higher again: it needs to open lower. The public should be selling the open for pros to buy it.

Beside that I wouldn't like to see CHINA closing below the $3.23 level, I would stop my position if that happens (that's the close on the first big white candle, as a bull I don't want to see prices penetrating that candle again).

[stocky]

This stock is trading under its book value (3.92) and with 230 million cash, its sitting on pretty big pile. Seems to be good stock at current price. Rest depends on the market where it throws [up or down].

[David Randolph]

CHINA tried to push higher on Friday but it seems it wasn't ready yet. Still consolidating the bullish move it had. I have little doubt the next leg for this stock will be up, we have a recent ascending trend confirmed by volume. Anytime a big white candle should develop.