Investment News Sends Ctrip.com International, Ltd., Qunar Cayman Islands Ltd in Different Directions

Ctrip.com International, Ltd. (ADR) (CTRP) is planning to invest in Qunar Cayman Islands Ltd (QUNR)

by Alex Eppstein

Published on Jan 13, 2016 at 10:23 AM

Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) and Qunar Cayman Islands Ltd (NASDAQ:QUNR) are moving in opposite directions this morning, after the former announced plans to indirectly "acquire a significant minority stake" in the latter. At last check, CTRP was 2.9% lower at $43.30, while QUNR has jumped over 14% to trade at $43.52.

It's been quite the fall from grace for CTRP. Since hitting a record high of $57.36 in mid-November, the shares have plummeted 24.5%, pulling back to flirt with their 20-week moving average for the first time since October.

Should the losses continue to pile up, CTRP could face a round of bearish brokerage attention. All 11 analysts tracking the stock rate it a "buy" or better, and its consensus 12-month price target of $58.13 stands at a 34.3% premium to current levels. Earlier, Deutsche Bank adjusted its price target on CTRP to $55.70 from $111.50 to account for last month's 2-for-1 stock split.

By contrast, option traders have blazed a decisively bearish path toward Ctrip.com International, Ltd. Specifically, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.70 ranks in the high 92nd percentile of its annual range.

Shifting the focus to QUNR, today's sharp gains have the stock near its 10-day moving average once again. This is significant, considering this trendline ushered the shares higher for most of December.

Meanwhile, short sellers may be starting to feel the heat. Despite falling in recent reporting periods, a substantial 15.7% of Qunar Cayman Islands Ltd's float remains sold short, and would take more than four sessions to buy back, at typical volumes. In other words, there's a solid amount of sideline cash available to fuel a potential short-squeeze rally.


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