The bullish recommendation was based on a Bloomberg report indicating that China's stocks regulator will begin pushing pension funds and housing funds into the capital markets.
On Balance Volume also backed up this trade with a parabolic upside move; indicating some insider knowledge of this government action before the press release.
My Jan 10th conclusion read:
Just like with the US Fed QE and Twist Interventions, in the short run, some upside easy money can be made. Just don't stick around the after party celebration too long.
Here is a weekly chart of YINN as of the close Jan 30th. The stock has moved 30% in our favor since Jan 10th.
Notice the horizontal line drawn from left to right, clearly identifies the previous support level at $25, now resistance until proven otherwise.
The daily chart is showing a Bearish Harami, I believe this pattern will be denied today. The %B indicator is diverging, and the over all pattern of trend is down.
Conclusion: Recommend taking the 30% profit by the end of this week; I believe the broader downtrend pattern will hold and CHINA will once again resume its downward trajectory.
Expect the shares to reach $23-25 range, but doubt their ability beyond that. I am looking for a failure at this level, and will look to get short CHINA once confirmed.
Tim Kathlina
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