Stocks, observation, market in general...

First, I would like to provide some updates on the stocks I'm watching or following in no paricular order:


HRBN - Harbin Electric

Back on June 19th in my post I have inserted a graph, which showed an important line that the stock was bouncing off for months. I was under impression that the market would recover due to falling oil prices. Well, the oil prices didn't fall. They just continued on impressive rally with everybody and their butlers buying anything that has the word "oil" in it. Remember dot-com era? Remember real-estate era? What does this oil rally remind you off now? I'll discuss more about this later in the post. Back to our stock. HRBN has never been doing good with market weakness, and since the market took a big plunge, it took HRBN along for a ride, especially since that support line was broken.

Now, it has been severely oversold (RSI is well below 30), but what is not oversold in this market? :) On the positive note, today it bounced off the lows in $12.90's that it's been bouncing off two times before. Plus, the bounce was very bullish, as it closed positive on good volume.

On the news front - We've heard the details of the financing: 3.5 mil shares at $14.17. It's a big dillution, but this was expected. Most of the money will go to the acquisition of the profitable company. News on this deal are supposed to hit any day now.

Yes, I'm disappointed in the short term movement of HRBN, but I like how the company is positioning itself for explosive growth in the next 2-3 years. No worries about long term potential so far.

Finally, the stock has been added to Russell 3000.

TXICF.OB - Tongxin International

Ever since hitting the resistance at all time high, we've been sliding on very small volume (except a few pre-arranged blocks). Nothing to be concerned about at this point, as the stock is really less than 10% from its highs, which is very good considered that most Chinese stocks are down 50% and more from their highs.

One thing that is bothering me is the Nasdaq listing, of course. Too many promises so far - not a good start for a company.
But, check out this latest news about the state of Chinese autosales:

http://biz.yahoo.com/ap/080708/china_gm_ford.html

Key points:

• "The Chinese vehicle market has continued to grow in 2008, setting a new first half sales record," said Kevin Wale, president of GM China, in a written statement.
  
• U.S., European and Japanese automakers and their local partners are investing heavily to expand production and sales in China, the world's second-largest vehicle market after the United States.
  
• Auto sales in China have been largely unaffected by high global oil prices because government controls have kept retail gasoline and diesel prices at levels that are among the world's lowest. Automakers say sales of SUVs and luxury sedans are growing at annual rates of up to 100 percent.
  

Bodes very well for both TXICF and HRBN.

Also, it appears Fenberg has increased his holdings to 2+ mil shares compared to 1.4 mil shares from the last filing. Not sure if this was the result of warrants exercise or new purchases. In any case, it can't hurt.


CNEH.OB - China North East Petroleum.

Well, the stock has more than tripled from its lows in 2008 all the way to $5.60.
This was a great price to take a break and reevaluate. This is what a lot of people did locking in their hefty profits. Stock went down 25% after reaching its highs few days ago on good profit taking. What happens next? Hard to say: oil is falling (at least for now), there are many other good oversold plays, and nobody wants to hold anything right now. At this point, I'm dropping it from "Undiscovered" stocks, as the recent run with huge volume pretty much confirmed that the stock was indeed discovered. Perhaps it's still a good play, but triple in a few months in this tough year is more than enough.

TVOC.OB - Texas Vanguard

Never really caught up with the masses. Still undiscovered, but really not doing anything. Perhaps, earnings in August will shed some more light. At this point, there is really nothing more on it to update. Maybe one day it'll jump like CWSI.OB did as highlighted earlier in the year.

BSIC.OB - Basic Earth Science

Earnings restatements news came out of nowhere. Was well explained by CEO, and the stock even came back nicely after all the negativity. But, with oil momentum slowly dying, the stock went down as well. Plus, late filing is another factor causing a slide. Always lock in at least half of your profits when the stock is up nicely (and it was up significantly at $2.90s)

AFAM - Almost Family

As mentioned earlier, it's a recession-free market-weakness-free stock :) Just keeps on going. Long term - no other updates.



New stocks on watch at this moment: HEK, SRRY.OB



Now, where does this market go from here? I personally doubt DOW will get to 10k. It may drop to 10,800, but this is as low as it might go, in my opinion. 10800-11100 is the bottom, and if we haven't reached it yet, we might reach it soon. Perhaps, one more big scare to flush everybody out? DOW should be around 13k again as early as late Sep / October, in my opinion. Time will tell :)

Chinese stocks should get back in favor, especially with Olympics exposure. Chinese economy is not slowing down as US economy. Upcoming earnings should show that.

For now, be really careful in this market. Good luck!