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Exciting technical times for Fuqi International

February 26th, 2010 · No Comments

There is no fundamental news, but we’re watching the chart like hawks. Today could be a crucial day…
Fuqi International (FUQI) is a Chinese designer, wholesaler and retailer of jewellery. It’s fundamentals are very sound, as one might expect in the burgeoning Chinese consumer market. We have set that out in fundamental pieces, for instance here. That piece was from December, but there hasn’t been any fundamental news out. But the stock has gotten even cheaper since, scared by the possible effects of monetary tightening.

We think these worries are highly overdone and expect the fundamentals of this company to assert themselves sooner rather than later. Earnings are a month away, we think there will be buying in anticipation of these. Unless there will be a general market sell-off that means that FUQI is likely to leave it’s downward trend channel. In fact, today we’re getting awfully close to that already, which is why we’re so interested to see in what will happen next.

If we can break the negative trend channel that has been established since mid September last year, that would be a major break out. And to be honest, we think this is a very good possibility. We can hardly imagine these shares, which are ridiculously cheap already, to become even cheaper. That leaves only one alternative…

Tags: FUQI