YANGZIJIANG

There was no month-end dressing in last 2 days and going by today’s continued fall, YZJ is going the opposite of its behaviour at end-Sept and early Oct when a sustainable breakout took it from around $1.80 to a high of $2.86 on Oct 2. This was followed by a minor new peak of $2.87 in mid-October. It was still doing alright after that peak until a heavy volume day on Oct 30 on 130.8m shares the highest turnover since debut on April 18 (462m shares changed hands), put pressure on the stock. Nevertheless, it managed to find support at $2.50 and some residual selling yesterday and today brought the stock to the next $2.43-45 support today. It is not as if YZJ has failed to penetrate new highs above $2.86-87 with no significant top formation there to justify a shakeout. It was different though early last month as the surge from 41.80 to $2.86 made it justifiable for an 18.5% correction to a low of $2.33 on Oct 4, 2 days after peaking at $2.86. Despite this big correction, the counter has stayed well above the lowest bollinger band (at $2.46) which it is now closing in. In fact only once on Aug 17 when the STI was floored to as low as 2962 that YZJ fell below the band which has never happened since April 18 debut. In addition, the close of $2.43 on Oct 4 when it hit $2.33 should be a pacifier for those concerned about a break of $2.43-45 support. On top of that the counter also rebounded strongly to close at $2.68 on Oct 17 after it fell to $2.43 and again on Oct 22 when its low was $2.49 it finished at $2.58. Now that it is back to below $2.50 at the low end of October’s $2.33-$2.87, buying on weakness below $2.50 appears appropriate.