Additional Trading Ideas:
Consider these stocks as possible trading ideas and watch list candidates. Some of these may need to see a break past key support or resistance:
SKX, XRS, GIL, KATE, NOK, XLF, LM, AA, FTK
NEW BULLISH Plays
KraneShares CSI China Internet ETF - KWEB - close: 36.01 change: +0.38
Stop Loss: 33.80
Target(s): To Be Determined
Current Gain/Loss: unopened
Entry on June -- at $--.--
Listed on June 18, 2014
Time Frame: 8 to 12 weeks
Average Daily Volume = 20 thousand
New Positions: Yes, see below
Why We Like It:
KWEB is an ETF designed to mimic the performance of the CSI China Overseas Internet Index. This ETF's top ten holdings are: Tencent, Baidu.com, Ctrip.com, Qiho 360 Technology, Vipshop, Netease.com, JD.com, 21Vianet Group, Youku.com, and YY Inc.
As a group the Chinese internet stocks have been a pretty strong rebound following the extremely painful March-May sell-off. Without a doubt this is a volatile group. Individually the stocks are definitely popular with the momentum traders.
Odds are you have heard about Alibaba and its upcoming IPO. If you haven't, check out the SoftBank (SFTBY) description in the Premier Investor Newsletter's play update section tonight. We think KWEB might be another way to play the excitement around Alibaba. Technically KWEB does not have any direct exposure to Alibaba but when Alibaba finally announces its IPO, expected this summer, it will likely drive a lot of interest into the Chinese Internet names.
Shares of KWEB have rallied to short-term resistance near $36.00. We are suggesting a trigger to open bullish positions at $36.25. KWEB does not have options so we have to play the equity.
Please note that I consider this an aggressive, higher-risk trade. Not only are the Chinese Internet stocks a volatile bunch but volume on KWEB is extremely low. That can make a volatile stock even more volatile.
We want to use small positions to limit our risk.
Trigger @ $36.25 *small positions*
Suggested Position: buy KWEB @ (trigger)