3 Chinese Stocks Riding Higher on Alibaba’s Coattails

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Today is a good day for Chinese stocks. The kingpin of them all, Alibaba Group Holding Ltd (NYSE:BABA), is scoring one of its largest up days ever. And the bubbly sentiment is spilling into its fellow countrymen. Indeed, notable up-gaps litter the landscape of Chinese American depository receipts (ADRs) across the board.

3 Chinese Stocks Riding Higher on Alibaba’s Coattails
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The culprit for BABA stock’s glorious gains lies in a mouth-watering announcement. The internet giant “is forecasting its largest quarterly increase in revenues since its 2014 IPO — 45% to 49%, up to $34.3 billion, for this year, fiscal 2018.” For a full breakdown on the fundamentals, check out this article by Joseph Hargett.

Before today’s trading session, BABA stock was already heading for a banner year. Year-to-date its share price was up 43%, and with today’s 10% gain, Alibaba shareholders are looking at 58% gains for the year.

With Alibaba already in the stratosphere, we may be better served by analyzing the broad swath of Chinese ADRs that are getting caught up in the excitement this morning.

Behold, three Chinese stocks to trade on BABA’s monster rally.

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Chinese Stocks to Trade: Baidu (BIDU)


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Source: OptionsAnalytix

We begin with the best known of the bunch, Baidu Inc (ADR) (NASDAQ:BIDU). The Chinese web services company hasn’t been able to duplicate BABA’s barn-burning performance this year, but it has cobbled together a respectable 14% gain.

Analysis of BIDU stock’s behavior over the past few years will reveal it’s been a hot mess. It’s been trendless and locked in a sloppy symmetrical triangle for months on end.

This morning’s up-gap was sold into with aggression. It took all of 20 minutes to give back the overnight gift. And at this point, BIDU is flashing a nasty bearish engulfing candle. With the stock dead in the water, I see little to get excited about here.

What would interest me is if Baidu can muster together enough strength to break above $192.50. This resistance level has kept a lid on the stock for the past month and breaking above it would signal a legitimate breakout of the symmetrical triangle.

Buy BIDU if breaks above $192.50. Otherwise, steer clear.

Chinese Stocks to Trade: JD.Com (JD)


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Source: OptionsAnalytix

JD.Com Inc (ADR) (NASDAQ:JD) shares received the biggest boost on BABA’s news. But it’s gains, too, are fading fast. The Beijing-based Chinese e-commerce company opened 5.3% higher, but at the time of this writing, the stock had fallen back to unchanged on the day. JD stock has set some milestones this year.

For starters, it’s up 62% and finds itself in an epic uptrend. It finally broke out of its post-IPO trading range and notched new all-time highs in the process.

While today’s large candle is throwing a wrench into its price chart, the bullish technicals can’t be denied. It’s probably worth waiting a day or two to see how today’s gap ‘n’ crap is digested. Once JD starts rising again, but it with a stop below $38.50.

Chinese Stocks to Trade: Ctrip.com (CTRP)


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Source: OptionsAnalytix

Our last trade worthy Chinese stock is Ctrip.Com International Ltd (ADR) (NASDAQ:CTRP). The travel services provider has been killing it for years now.

Today’s up-gap carried CTRP to a new all-time high. Though, like its predecessors, CTRP is fading fast in early morning trading. But with the stock firmly entrenched in an uptrend, complete with rising 20-day, 50-day and 200-day moving averages, any further selling is likely a buying opportunity.

Once today’s selling subsides, and CTRP registers an up-day, buy shares with a stop below the $53.50 support zone.

At the time of this writing, Tyler Craig held bullish positions on BABA.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/06/3-chinese-stocks-riding-higher-on-alibabas-coattails/.

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