Everyday Review

After nearly 500 stocks fall and hit the daily limit, the bear is on his way or it just a "Fake Bear"?

Hi there, is Changsheng again.

After almost 500 stocks fall 10% hit the daily limit the day before, last night Shanghai Composite Index, Shenzhen Component Index, and Chinext Price Index all recorded grown.

7/18 Shanghai Composite minute Chart

So today's main question: Is the Bear already gone?

My answer is Yes and NO.
Yes, because of the Blue chips stock haven't changed their trend, inside value, or "quality" whatever you want to say. What I mean is, Blue chips stocks really don't give a damn about what happened the day before. Cause over all, Blue chips stocks still have low PE,  low P/B, and high cash flow/share ratio. They are not the problem right now. They are the one got accidentally short by individual investor.
No, because of those GEM stocks, still over value. All of the constituent stocks in Chinext Price Index have an average 63.06 PE ratio. Over all, only half of the stocks public in GEM have a PE ratio lower than 100, and Financial fraud is an open secret as well.
That happens on those Small Cap stocks get public in the main market as well. So pretty much Blue chips is the only way to go.

For example:
"Star stock in GEM market" Le.com's holding company-Leshi Internet Information & Technology Corp, Beijing is suspected set up a Ponzi scheme to get money and the other company holding by Leshi, name Leshi phone (not sure the Official English name)'s Financial Chain broke down.

Le.com (09/01/2014~04/14/2017) Suspension since04/17

About yesterday Recommendations:

Keep the put options, and stop lost all the GEM position as soon as possible.

Reason:

1. Unclear future of GEM market.
2. Last night condition not really change the trend of GEM.

My trade review:

1. Sell out Shanghai Fosun Pharmaceutical (Group). Ticker: SHA.600196

Fosun last night minute chart

Good decision, it has a major drop after I sold out the day before yesterday.

    2. Sell some of the position of Kweichow Moutai Co,. Ltd.

        Haven't verification yet.

Last night I didn't make any trade.

曾昶升
2017/07/18

Disclaimer:
All the information is collected online.
All investments involve risk, including loss of principal. Past performance does not guarantee future results. There is no assurance that the investment process will consistently lead to successful investing. Asset allocation and diversification do not eliminate the risk for experiencing investment losses.
All the recommendations is base on personal experience, I'm not responsible for any action taking based off of my recommendations.