Buy Pick of the Day: SINA

Courtesy of David at The Oxen Group

Buy Pick of the Day: SINA

The Oxen Group, for Wednesday, is trying a slightly different style of trading. The Oxen Group is picking a buy on a stock that has what would seem fundamentally bearish news. Sina Corp. (SINA), an online media group, reported weak quarterly earnings in after hours, dropping 33% in profits and forecasting lower than expected revenues. A trend, however, that The Oxen Group has noticed is that stocks that do this badly open up extremely far down compared to prices from the day before. Typically, however, at this low price, there are some potential buyers and it drives the price back up. The price will then fall or rise based on the market as a whole. The market looks potentially bullish, tomorrow. The Chrysler sale was approved, Asia is ticking, and futures are up at the highest levels seen in some time for pre-trading for tomorrow. And, it was not all bad for Sina. The company was confident in their industry’s recovery. Their year over year sales were up, and they did beat estimates by 0.01. The company dropped 5% in after hours. That translates into a significant selloff early in the day. We think that is a nice time to buy in. The technicals also help to think that the stock will see some quick selling at the beginning of the day. The stock is overbought on fast stochastics, overvalued, and near an upper bollinger band. However, intraday, there may be some room for growth on the gap down and a positive market. Get involved early and watch this stock bloom.

Entry: Recommend buying within first 5-20 minutes.
Exit: We recommend exiting after a 2-4% increase.
Upper Resistance: 31.00

So far, Oxen Trades had potential for these profits (which are David’s actual returns):

Summary of David’s Oxen Trades: