2 Chinese Stocks Soaring Today

YECO will sell restricted shares at $10 a pop to fund its latest purchase

Nov 19, 2018 at 2:03 PM
facebook twitter linkedin


The U.S. stock market is spiraling today on tech sector weakness. While entertainment name Walt Disney Co (NYSE:DIS) is getting hit with broader headwinds, Chinese stocks Nio Inc (NYSE:NIO) and Yulong Eco-Materials Ltd (NASDAQ:YECO) are bucking the bearish bias. Here's a closer look at what's moving shares of DIS, NIO, and YECO.

Disney Clears a Big China Hurdle

Walt Disney cleared a key hurdle in its bid to buy 21st Century Fox's (FOXA) entertainment assets, after China gave a green light to the deal. After gaining as much as 1.4% earlier, though, DIS stock was last seen down 0.3% at $115.87.

Nevertheless, the equity is still trading comfortably north of its 80-day moving average -- currently located at $113.81 -- which has contained pullback attempts since late September. Plus, Disney shares are up 7.7% on the year, and hit a three-year high of $120.20 as recently as Nov. 9.

Amid slightly accelerated options activity today, one speculator appears to be positioning for even bigger short-term losses by buying to open December 116 puts for $3.25. If this is the case, breakeven for the put buyer at the close on Friday, Dec. 21, is $112.75 (strike minus premium paid).

Citron Said Nio is More Than "Chinese Tesla"

Citron Research chimed in on Nio today, saying the Tencent-backed electric carmaker is "much more than 'Chinese Tesla.' Absurd short interest ignores compelling product and patient investor base." The noted short seller set a near-term $12 price target on NIO stock, representing expected upside of 50.9% to its current perch at $7.95 -- up 10.6% so far today.

Nio has surged 31% since its Big Board debut at $6 per share back on Sept. 12, but remains well off its Sept. 14 record high of $13.80. Options traders are targeting even more upside, too, with more than 51,000 calls on the tape so far -- four times the average intraday amount and closing in on the all-time high of 53,979 calls traded in a single day, hit last Wednesday. Buy-to-open activity has been detected at the December 8 and 9 calls, where almost 18,700 total contracts have been exchanged.

Michelangelo's Crucifixion is YECO's Latest Purchase

Eco-friendly building specialist Yulong Eco-Materials said it is buying Michelangelo's Crucifixion painting for $75 million. The purchase is still awaiting board approval, and will be funded by a the sale of 7.5 million YECO restricted shares at $10 apiece -- a 96% premium to last Friday's close at $5.10. As such, the equity is up 23.5% to trade at $6.30.

Volatility is nothing new for YECO stock, which surged almost 570% on Oct. 17 after the company announced the purchase of the Millennium Sapphire. The shares went on to tap a record high of $17.87 on Oct. 18, before pulling all the way back to $5 -- a former layer of resistance that may have switched to a more supportive role.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners