3 Chinese Stocks Getting Crunched

Baidu Inc (ADR) (NASDAQ:BIDU), Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), JD.Com Inc (ADR) (NASDAQ:JD), and other Chinese tech stocks are reeling today

by Alex Eppstein

Published on Jan 4, 2016 at 11:06 AM
Updated on Jun 24, 2020 at 10:16 AM

China-based tech stocks are swooning this morning, following a nearly 7% data-driven sell-off on the mainland's Shanghai Composite. Among the names taking it on the chin are Baidu Inc (ADR) (NASDAQ:BIDU), Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), and JD.Com Inc (ADR) (NASDAQ:JD).

BIDU has plunged 2.3% to $184.69, but has so far maintained a foothold atop its 160-day moving average. Since hitting a near-term peak of $217.97 in late November, the shares have given back over 15.3%.

In the options pits, this negative price action has prompted a raft of bearish betting. BIDU's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.73 rests just 3 percentage points from an annual high. By contrast, analysts remain confident in Baidu Inc, with six of eight sporting "strong buy" opinions, versus two "holds" and not a single "sell" rating.

CTRP is off 2.7% at $45.07. This Chinese stock, too, has fallen off in recent months. Since touching an all-time peak of $57.36 in mid-November, the shares have surrendered over one-fifth of their value. Looking more closely at today's chart, CTRP is set to close below its 60-day moving average for the second straight session, after not settling below this trendline once since Oct. 14. 

Despite the aforementioned pullback, 100% of covering brokerages consider Ctrip.com International, Ltd. worthy of a "buy" or better recommendation. This could set the stage for future downgrades, potentially exacerbating selling pressure.

JD is the worst off of this trio of Chinese stocks, losing 8.5% at $29.51. In so doing, the shares have firmly breached their 30-day moving average, which had ushered them higher since late September.

If option traders get their way, JD.Com Inc will bounce. The stock's 10-day ISE/CBOE/PHLX call/put volume ratio stands at a top-heavy 19.12, with more than 19 calls bought to open for every put in recent weeks. More significantly, this ratio registers above all but 4% of comparable readings taken in the past year.

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