Micro-Blogging Revolution *CHINA*Hello Traders,
I am taking my first bite at my newest position. I have been stalking $WB for quite some time, wanting exposure to the Chinese "micro-blogging revolution".
If you want the fundamentals by the numbers you'll just have to look it up on your own. But the foundation of my fundamental screening in equities is based off of earnings growth... aggressive earnings growth. Both on a QoQ basis, and a YoY basis. And this company has positive YoY and QoQ metrics when it comes to the cash metrics.
Risks: One of my friends mentioned that Weibo along with MOMO (which fits my fundamental criteria for investment also) are being mentioned on CNBC and other mainstream media. I view this as a risk because the non-professional retail crowd starts piling in on a position. The retail crowd I'm referring to are the quote on quote "long term investors" which buy positions based off of what CNBC, FoxBusiness, etc recommends and then get shaken out of their over-levered positions a few days, weeks later... I prefer not to be entering positions at the same time the non-professional crowd piles into the same position.
The Trade: Depending on the price action the following days will determine if I make this a short term swing trade (2 weeks - 1 month) or what I prefer as a position trade (I use fundamental stops and a trailing 200 MA stop after higher highs / higher lows are printed on the chart). Main resistance is highlighted on the chart at the YTD highs. Also keep in mind the gap fill (55.70) as a profit taking area for shorter term swing traders.
Entry: The entry was based on a descending channel bullish break.
Stop: Stop has been placed slightly below the lows of the descending channel's rounded bottom.
Trade smart, and with a plan. Cheers guys! =)