U.S. Traded Chinese Stocks Sink Amid
In a surprise move ahead of Scheduled trade talks between Washington and Beijing in October. 10 and 11, the Trump administration is considering removing the list of Chinese companies from U.S. stock exchanges in part of a broader effort to limit U.S. investment in Chinese companies to protect U.S. investors, according to a Bloomberg report.
As of February, 156 Chinese companies operate on U.S. exchanges with a total market capitalization of $ 1.2 trillion, according to government data. Chinese authorities have remained reluctant to allow foreign regulators and accounting firms to audit local businesses, citing national security concerns.
This is a very high priority for the administration. Chinese companies that do not comply with the PCAOB (Public Enterprise Accounting Oversight Board) process pose risks to U.S. investors,” a source close to the deliberations said, according to Reuters.
Many U.S.-listed Chinese stocks fell between 5% and 10% on Friday afternoon after the report appeared, which may result in a continued sell-off ahead of the expected early October trade discussions. Traders looking for short exposure should consider these three Chinese companies listed on US exchanges that look weak from a technical point of view. We will work through various business ideas to benefit from continuous selling.
With a market capitalization of over $ 400 billion, Alibaba Group Holding Limited (BABA) provides online and mobile trading businesses in China as well as globally. The 20-year-old company operates through four business segments: Core Commerce, Cloud Computing, Digital Media and entertainment, and innovation initiatives and others. Alibaba, which many consider China’s answer to e-commerce titan Amazon.com, Inc. (AMZN), saw its bottom line for the first quarter of fiscal 2020 increase 56% on a year-on-year basis (YOY), while revenue grew 42% from the previous year’s quarter. Management cited the strength in the company’s China trade retail business, Ele.me, and Alibaba Cloud’s robust sales growth for the solid results. The company began trading on the New York Stock Exchange (NYSE) in September. 19, 2014, after raising $ 25 billion to register the largest initial public offering (IPO) ever. Alibaba shares have returned 21.09% in the year as of September. 30, 2019.
The trading conglomerate’s shares added Most of their year-to-date profit (YTD) between January and April before giving way to mostly-in-range price action over the past five months. More recently, the stock fell 5.15% on above-average volume on Friday afternoon as news of a possible name suppression of Chinese troubles broke. In a bearish sign, the price closed below the 200-day simple Moving Average (SMA) closely, a move that may trigger further selling this week. Traders opening a short position should consider buying to cover close to cerca 150, where the price can capture an offer from a crucial support area. Protect capital by placing a stop-loss order somewhere above the 50-day SMA.
Momo Inc. (MOMO) operates a mobile-based social and entertainment platform in China, allowing its users to establish and expand social relationships based on location and interests. The $ 6.46 billion company, which listed on the Nasdaq in December 2014 after a successful bolsa 216 million IPO, drives most of its revenue from live video service, Value-Added Services, Mobile marketing Services and mobile games. The social media giant posted Q2 adjusted earnings of 82 cents per share, beating analysts ‘ expectations of 72 cents per share. However, the bottom line contracted 39.3% for the previous year’s quarter. Momo hit a snag in April when its Poplar dating app Tantan was pulled from app stores in China as government authorities ordered a review of cyberspace content. From September. 30, 2019, Momo shares have a YTD return of 34.06%.
Momo’s shares have fluctuated within a broad symmetrical triangle since early April. A breakdown finally occurred in Friday’s session, when the price closed below the pattern’s lowest trend line and the 200-day SMA on solid volume. Traders short selling at these levels should look for a move to around $ 26, where the stock finds support from a horizontal line connecting a series of price actions over the past 12 months. Implement risk management by placing a stop order above Friday’s high at viernes 33.58 and modifying it to breakeven if the price falls below the early August swing low at $ 28.82.
Headquartered in Beijing, iQIYI, Inc. (IQ) provides online entertainment services under the iQIYI brand in China. The company’s core services include internet video, live streaming, online games, online literature, animations, e-commerce, and social media platforms. iQIYI, which was formed in 2010, raised $ 2.25 billion in the United States before trading on the Nasdaq in March 2018. Even though the company reported a 15% increase in Q2 YoY revenue and saw its subscriber base top 100 million users, it still posted a net loss for the period of RMB2.3 billion ($ 339.0 million). Trading at $ 16.61 with a market cap of $ 12.04 billion, the stock has gained 11.70% so far in 2019, underperforming the internet content and information industry average by about 7% as of September. 30, 2019.
Since setting a 2019 YTD high just above febrero 29 in February. 25, iQIYI share price has remained stuck in a downtrend and looks set to test January’s swing low at $ 14.35. Although stocks have fallen sharply in the past two weeks, the Relative Strength Index (RSI) sits above oversold territory, giving prices ample room to slide further before the current downward movement runs out. Those who Shorten stocks here should reduce losses if the price closes above the 50-day SMA and make a profit if the stock falls to the January low.