Friday, November 05, 2010

WATG Makes the Cut

WATG has been in my short list from late April. Since then, in early May, the stock value took a 40% tumble (from about 12 to 7). Finally, in the past five months, it found a base at around 8. Meanwhile, it maintained a range above the 200 dma and on October 11, it rose above the 50 dma in a definite manner. In my view, these are positive technical signals.

Wonder Auto Technology, Inc.(WATG), in the Chinese auto parts sector, through its subsidiaries, engages in the design, development, manufacture, and marketing of electrical parts, suspension products, and engine components.

Heavy short positions may be forced to cover if the uptrend continues, thus catapulting the stock price.

Positives are:

•Good chart pattern. Recent break up above the 50 dma.
•Consistent uptrend and rebound from the lows of late August '10.
•Good average daily volume of about 520,000 shares.
•Forward P/E ratio is at about 11.

Closing yesterday at 10.40, WATG appears to be an attractive prospect.

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