Saturday, April 3, 2010

The list of stocks down 5%+ on heavy volume on Friday (correction: Thursday) was dominated by Chinese stocks. Here are the names:

CNAM
DYP
HEAT
CCME
APWR
CAGC
TSTC
RINO
GRRF

All of these stocks had massive run ups from the March 2009 bottom along with impressive earnings growth but are now breaking down on heavy volume. Falling on heavy volume in and of itself is not really a big deal. However, when stocks in the same "sector" all do it in unison after announcing record earnings and mean while many of them are forming topping patterns after 500%+ run ups its a worrying sign.

It is my firm belief that Chinese stocks are in the process of forming a major top now and will offer opportunities to short them in the near future. So keep your eyes peeled for profitable opportunities on the short side!


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