2 Chinese Stocks Popping After Earnings

Sina is the parent company of Weibo

Nov 28, 2018 at 10:00 AM
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    The shares of Weibo Corp (NASDAQ:WB) are trading up 6.2% at $62.76, after the China-based social media name reported third-quarter adjusted earnings of 75 cents per share on $460.2 million in revenue. This was more than analysts were expecting, while advertising and marketing revenues also jumped more than forecast.

    On the charts, WB stock has been trending lower since its mid-February peak above $142 under pressure from its 50-day moving average, down nearly 40% year-to-date. This trendline contained a brief rally off the security's late-October 17-year low of $53.11, but today's pop has Weibo on track to close north of here for the first time since June 14, and puts the shares on track to snap their nine-month losing streak.

    Short sellers have been cashing out amid WB's slide, with short interest down 17.4% in the most recent reporting period. However, the 6.91 million shares still sold short accounts for more than two-fifths of WB stock's available float, or 2.6 times the average daily pace of trading.

    Beijing-based Sina Corp (NASDAQ:SINA) also reported earnings overnight, with third-quarter adjusted profit of 93 cents per share coming in above the consensus estimate. Both total revenue and advertising and marketing revenues beat expectations, too.

    Considering Sina is the parent company of Weibo, it's not surprising to see similarities in their technical performance. The shares topped out at a seven-year high of $124.60 in late February, before embarking on a steady path lower. SINA stock hit a nearly two-year low of Oct. 30. Today, the equity is up 7.5% at $66.55, and could be headed for their first monthly gain since January.

    Unlike WB, short sellers have been actively targeting SINA stock . Short interest on the tech name surged 34.4% in the two most recent reporting periods to 1.39 million shares. The bearish bandwagon is far from full, though, considering this accounts for a low 2.2% of the stock's float.

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