China Precision Steel Rips Higher, Sympathy Plays to Go Next
China Precision Steel, Inc. (NASDAQ:CPSL) has taken off to the upside over the last two days. It has soared from $1.51 yesterday at the open, to a high today of $1.93. That is a 28% move in two days. These Chinese steel stocks have been near their 52 week lows while China demand keeps on chugging.
CPSL may continue to run higher, however, the risk reward their is no longer great. Instead, traders will soon look for the sympathy plays, other China steel plays that have not run yet. The two stocks I like are General Steel Holdings, Inc. (NYSE:GSI) and Sutor Technology Group Ltd. (NASDAQ:SUTR). GSI is trading at $2.68, the chart looks ripe for a massive move and SUTR is trading at $1.74, also at the lows and looking like any buyers would send this thing shooting higher.
The key here are comments made by the CEO of GSI, Henry Yu. "Demand continues to be robust. These comments were made recently on August 6th.
As CPSL runs higher, it is highly likely GSI and SUTR will catch fire. Watch these closely.
Chief Market Strategist
Disclosure: Chief Market Strategist Gareth Soloway owns SUTR and GSI.