Chinese ADR’s Struggle Despite Market Rally

This morning, many of the leading Chinese ADR’s are struggling to catch a bid despite the strong stock market rally. This week, the important and highly followed Shanghai Index (China) is closed for the next three days as China celebrates its National Day holiday. Recently, the Shanghai Index has been trading at new three year lows on signs of an economic slowdown in the world’s second largest economy. Many traders and investors are now expecting the Chinese central bank called the People’s Bank of China to begin another round of stock market stimulus to help inflate their stock market like Europe and the United States. Until the Chinese central bank makes this move their stock market is vulnerable to further declines in the near term.

Today, leading Chinese ADR Baidu Inc (NASDAQ:BIDU) is declining lower by $3.75 to $113.14 a share. Short term traders can watch for intra-day support $112.00 and $110.65 levels. The daily chart of BIDU has important support around the $100.00 level should the stock continue to fall.

Some other leading Chinese ADR’s that are not participating in today’s stock market rally include SINA Corp (NASDAQ:SINA), Inc (NASDAQ:SOHU), and Netease Inc (NASDAQ:NTES). As long as the Shanghai stock market remains weak all of these leading Chinese ADR’s could be susceptible to further declines in the near term.

About Nicholas Santiago 575 Articles


Nicholas Santiago started trading in 1991. In 1997, he became a licensed Series 7 and 63 registered representative. He managed money for a large, affluent private client group. After applying his knowledge to his client base, he decided it was time to begin teaching those interested in learning his methods. He is an expert in Technical Analysis. He has become an accomplished technician in the studies of Elliot Wave, Gann Theory, Dow Theory and Cycle Theory. In 2007, he partnered with Gareth Soloway to form InTheMoneyStocks.Com and realize his dream of educating others about the truth of the markets.

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