Trade Alert: Betting On China

An oversold, undervalued Chinese stock.

”Chinese Stocks Hit Rock Bottom”

That’s the headline on Zero Hedge today, as the Hang Seng China Enterprises Index suffers its worst weekly loss since last March, raising the possibility that the Chinese government might step in in the near future with some stimulus.

Scanning Chinese stocks that trade in the U.S. yesterday, we found one with a Relative Strength Index below 30 (suggesting it was over sold), and a Chartmill valuation rating of 9 (on a scale of 0 to 10).

Today, the stock is bouncing off that RSI.

This stock is down nearly 40% over the last year, despite being profitable. My bet is that it will be at least 10% higher by this time next year.

Details below.

Today’s Trade