China Mobile Stock Presents Bullish Opportunity
A stock that deserves to be on any watch list is China Mobile (CHL) which has over the last seven months been forming a nice cup with handle pattern. For the bulls CHL stock looks as if it is ready to break out and make another run to new all time highs.
Being the largest wireless provider in China, China Mobile boasts a market capitalization of nearly $350 billion. The stock peaked on October 29th, 2007 at $104.00 and over the next five months fell in price hitting a bottom of $65.01 on March 17th, 2008.
The recent consolidation suggests CHL is a buy when the stock breaks out of its latest base. The magic number to look for is $90.12, which is 10 cents above the $90.02 high set on 4/24.
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there is a huge resistance around $100 (last November high).
agreed. I think though this will be broken with a strong break out of this handle. The stock may stall and setup another base, but CHL has a lot of potential.
FYI your charts reference FXI when I think you mean CHL.
What do you make of todays break down of the channel? Looks to be weak support around $79 then a gap that may need to get tested around $75.
FXI got creamed today tho too… I haven’t seen daily volume yet, I wonder how much we can read from that?
I dumped half of my RIMM and AAPL (my largest) positions on Monday b/c I thought the market run-up was feeling a little tired. Looks like it may have been a wise decision. Even FRO couldn’t hold onto gains today, but holding over 60 is a nice sign.
Bryan,
Thanks for pointing out the chart typos, made those corrections. I was obviously getting my Chinese picks mixed up there.
Regarding CHL if anything it tells me the stock needs more time and this base will take longer to form. My guess is support will come next at $78 – $80. The volume on the sell off today alongside the gap down just doesn’t look too dandy for the short term.
As for FXI it is the same story, I had when that happens though because the person who bought at $160 is now in a crummy position. Do you hold or sell? A lot of volume for this ETF as well has me worried, either way at the extreme $140 has to hold up, $150 being the “hopeful” target support.
As for taking profits time will tell how that pans out, I think short term it may pay off if you can buy back those shares cheaper. RIMM is still holding its gap range which is good but with this market who knows. I have a hard time believing that oil hitting record highs was the sole reason for the widespread sell off.
On my end my dilemna is whether or not I sell my HXM (#2 ranked in its group) to pick up GFA ($1) and get into the Brazil trend early with the stock sitting right at the $40 pivot (even more lucky would be grabbing GFA at $38 and the 50 day moving average). I am basically even on HXM right now.
What you think?
Blain
I’ve been scared to touch homebuilders now for about 18 months so I can’t help you there. What drew you to them?
It’s interesting, if you look at the chart the two moved pretty similarly up until about mid-September then GFA took off and HXM hovered around breakeven. Both stocks are playing with their respective 50-days right now. Brazil is definitely getting more love than Mexico right now on the global stage, and GFA has the momentum.
What’s drawing you to int’l homebuilders?
Hey Bryan,
I was drawn towards single family home builders with the influx of institutional capital over the last month. Based on investors.com GFA was the #1 stock in the group, with HXM being #2. I bought HXM at just above $61 because the technicals looked better, which ended up being the wrong play in retrospect.
After today though and the lack of momentum of the group overall I have bumped my stop loss on HXM way up to $60.55 and will sell into any strength. I think long term GFA and really all Brazil stocks are going to do well but the other half my portfolio is in DRYS which I snagged at $87 and I think there is much more momentum to be played there with shipping.
Where does your interest lie right now?
Blain
Honestly right now they lie with studying for the CFA Level 1 exam in early June. I still try and keep up with my trading/investing news but not nearly enough to be consistently trading. I’ve liked this site since I added it to the news reader in (I think) January.
My portfolio is a mish mash of tech and high-yield dividend stocks right now. I got into financials too early but sold out of them after taking my licks. So I settled on shippers with fat div payouts and beat up tech names. The shippers will hopefully hold up well throughout summer. And with RIMM and AAPL both selling their product really well, I’m hoping I can keep running with them. But they’d run up so much lately that I had to take a little of the table just to lock in gains.
I’m really anxious to see the new frontier market ETFs that should be coming to market soon. I think they have potential, and they should be fun to watch at the very least.