Chinese Internet Stocks Signal Trouble
This afternoon, many of the leading Chinese internet stocks are coming under some distribution. Last night, China reported some economic data that was below analysts expectations. This tells us that the world's hottest economy could be cooling off. Any slowdown in China could be problematic for the global economy.
Sina Corp (NASDAQ:SINA) is a leading Chinese internet stock that started the session very strong. The stock traded as high as $80.80 a share at the open. This afternoon, SINA is trading lower by $2.51 to $74.89 a share. This is a reversal of nearly $6.00 a share from the intra-day high. If the stock closes at this level it will have formed a bearish outside reversal day on the charts. The volume is also slightly higher than most of the past trading days and this tells us that the sell off has institutional conviction. The stock will have very good daily chart support around the $61.00 level. Short term traders can watch for intra-day support around the $73.00, and $70.66 levels.
Other leading Chinese internet stocks that are coming under intra-day selling pressure include Baidu Inc (NASDAQ:BIDU), Netease.com Inc (NASDAQ:NTES), and Sohu.com Inc (NASDAQ:SOHU). These leading Chinese internet stocks should be followed very closely over the next week or so. Further reversal days in the Chinese ADR's could be signal future problems ahead for the Chinese economy.