I’ve seen some unsettling action in a few of our stocks, I think we need to make a few small adjustments.
YY Inc. (YY) announced a 5.75 million share secondary stock offering on Monday and the stock dipped today from its 80.6 Monday close to around 74, a decline of over 8%. Stocks generally react proportionally to this kind of secondary, but YY’s dip seems a little steeper than usual. On the other hand, the stock hasn’t fallen below its open, so I will wait and see. I will put YY on Hold until it’s clear that the reaction isn’t going to turn irrational. HOLD.
JD.com (JD) reported quarterly results on Monday, and while revenue was excellent, the company reported a slightly larger loss than expected and the stock dipped a bit. JD has been hanging around its 25-day moving average, but it has pulled back for five days with one high-volume day. I’m going to put the stock on Hold, but a dip below the 50-day moving average (now at 42) would be bearish. HOLD.
Keep your eye on Tencent Holdings (TCEHY), which will report its quarterly results tomorrow morning and China Lodging (HTHT), which will report tomorrow after the close. And Alibaba (BABA) will release results on Thursday morning.
The weekly update for Cabot Emerging Markets Investor will come out on Thursday, but if I see anything that needs rapid action, I’ll send another Special Bulletin before then.