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June 10, 2008


Bad Day for Stocks in China

Here’s a screenshot from my monitor following today’s trading in China. That’s a daily chart of the CSI 300 Index on the bottom and the quote sheets above list the 70 or so most actively traded stocks — if you don’t know which ticker symbols represent which companies, you’re out of luck, sorry.

Note that “limit down” is 10% and that there’s no way to “sell short.” The sheets also have columns which list the 52 week high date and price for each issue, which you may want to study. A lot of folks who came late to this party are deeply underwater.

We have our answer about whether the late April, early May jump was a “sucker’s rally.” Moving to the US markets, with one eye on Lowry’s (abysmal) Buying Power numbers, we can anticipate a similar breakdown in the major averages, yes?

Related:
China’s Stock Markets Have Topped, November 8, 2007
What It Will Look Like When the Chinese Stock Bubble Bursts (Try Try Again), March 30, 2008

This entry was posted on Tuesday, June 10th, 2008 at 5:20 pm (utc+8) and is filed under China_Investing.

7 Responses to “Bad Day for Stocks in China”

  1. Brian said:
    June 10th, 2008 at 6:54 pm

    that’s a huge head and shoulders pattern if it breaks

  2. C. Maoxian said:
    June 10th, 2008 at 7:20 pm

    Brian: Yeah, I guess the measured move would be 5800-3300 = 2500, 3300-2500 = 800, so 800 is the target. :-)

  3. bob said:
    June 10th, 2008 at 8:45 pm

    which ETFs would be best if it does break?

    thanks for this, i haven’t been following the china ones at all recently.

  4. C. Maoxian said:
    June 10th, 2008 at 9:20 pm

    I think the CAF (a closed-end fund) is the only way to get semi-direct exposure to the A-share market … there’s the FXI and FXP for the H-share market, and lots of other China-focused ETFs I can’t think of off the top of my head.

  5. Born2Code said:
    June 11th, 2008 at 1:17 am

    does that mean that you are still in favor of owning CTRP or in favor of ditching CTRP?

  6. Zack said:
    June 11th, 2008 at 6:24 am

    FXP was mentioned on Fast Money as the way to play the Chinese meltdown.

  7. darin said:
    June 11th, 2008 at 8:24 am

    FXP started trading at 75 on Nov 5 and is at 78 today.
    FXI was trading 187 on Nov 5 and is at 138 today.

    Not a very good idea to have the FXP for a long term trade. The better idea would be to buy puts on the FXI

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