China HongXing – Down Trend Coming to an End?

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China HongXing has been on free fall recently after announcing worst than expected quarterly. Although the company is still cash rich, the financial ratio has been pretty poor compared to their peers. ROA & ROE are only a pathetic 3% in FY2009 compared to previous years of more than 10%. Recent chart suggests that China HongXing may be ending a down trend by showing doji candlesticks for past two trading days. Furthermore, it looks like a falling wedge has been formed and the chart  is close to breakout soon. No clear patterns for the time being until the breakout or a reversal candlesticks pattern is observed.

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3 thoughts on “China HongXing – Down Trend Coming to an End?”

  1. The company is cash rich and have good future expansion plan. The Chairman and CEO shared their expansion plan in Shareholders meeting that they are reserving their cash to expand their retail shops in China and planning to acquire an oversea brand name.
    It looks like current price is bottoming up but watch carefully their coming quarterly earning announcement. If the earning is worse than expected and show sign of declining, that will be another round of selling off.

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