For the first post with analysis, I'd like to take a look at the technicals on CNIT. I use StockCharts to do my analysis. It's a fantastic tool which allows for a lot of flexibility.
Let's take a look at the daily chart on CNIT. Since this is my first chart, I won't annotate it just yet. Maybe on Monday or Tuesday.
Click the image to see a larger version of the chart.
The immediate thing you'll notice by looking at the chart is that it clearly hasn't been favored very highly on Wall Street in the past 8 months. After a rally in October 2010 that saw CNIT rise from around $4.6 to a high of $6.78, the stock (as with many other small cap Chinese stocks) has gone all the way down to, at one point, a low of $1.40. I've been in and out of the stock since mid March 2011, and am up on only long positions. The primary reason for that is that, in early June when the stock fell to $2 and then $1.50, I quickly grabbed lots of shares. The primary reasons blamed for the drop was that the then CFO of the company, Ms. Jackie You Kazmerzak, resigned unexpectedly, citing she was pursuing another career opportunity. Finding this to be an insufficient reason for the stock to be so poorly treated, I jumped in at stages (during the drop) to amass around 40,000 shares. When the stock rallied on June 8th, I was there to seize the gain.
At this point, there are technical reasons to believe that CNIT's downtrend has reversed and it is now forming an uptrend which will take it to new heights. The first key level will be the 50dma, which is currently at $2.28. If it can sustain some of the recent momentum, there is no reason to believe that it couldn't pass this mark mid next week, after which it will need to stand ground above the 50dma to consider a move to $2.95, the current 100dma.
No comments:
Post a Comment