Chinese ADR’s Are Lagging The U.S. Markets

We all know that the Dow Jones Industrial Average and the S&P 500 Index are making new 52 week highs on a daily basis. One popular group of stocks that is no longer leading the markets higher is the Chinese ADR’s (American Depository Receipts). The leading Chinese ADR in the world is Baidu Inc (NASDAQ:BIDU). This stock is trading near its 52 week low which is $83.30 a share. Please note, in July 2011 BIDU stock traded as high as $165.96 a share, so traders and investors can see how dramatic the decline has been in this stock. The stock remains in a down trend by trading below its important daily 50 and 200-day moving averages.

China has been known to be the growth engine of the world since its population is around 1.3 billion people. The country is also one of the largest manufacturers in the world with massive exports. Just look at any of the products that are in a home or on a person and most people will see that it was likely manufactured in China. If Chinese growth is slowing down it could have a negative effect on many U.S. companies such as General Motors Co (NYSE:GM), Yum! Brands Inc (NYSE:YUM), Wynn Resorts Ltd (NASDAQ:WYNN), and Las Vegas Sands Corp (NYSE:LVS). All of these companies do a lot of business in China.

Some leading Chinese ADR’s that have been weak compared to the U.S. stock indexes include China Mobile Ltd. (ADR) (NYSE:CHL), Inc (NASDAQ:SOHU), and SINA Corp (NASDAQ:SINA). All of these stocks should be viewed as trading vehicles and not long term holds at this time.

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.

Visit: InTheMoneyStocks

Be the first to comment

Leave a Reply

Your email address will not be published.