11 Feb - 16Feb 2013

Downtrend Might Come Due to Sell Signal Chaos Confuses Investors

Downtrend may come due to sell signal Chaos confuses investors

Past Issue Prediction “Automobile industry will lead the market due to strong fundamentals. Geely Automobiles (00175) surged 20% within a month. Great Wall Motor (02333), the ma-jor SUV manufacturer, even made a historical high. In-vestors should focus on those fast growing automo-biles companies.”

7 OCT 2012

Then….. The automobile industry has been performing well. The aforementioned stocks showed steady growth in the

past four months. Geely (00175) rose near 40%. Great Wall Motor (02333) even rose 50%. Brilliance China (01114), manufac-turer of BMW, achieved a 25% gain. The whole indus-try is still going up and will lead the market.

MARKET RECAP

11 Feb - 15 Feb 2013

The performance of in-

dexes was stable. They climbed steadily after the Lunar New Year’s holiday. The Mainland ’A’ share mar-

ket is still closed so that the movement of Hong Kong stock market is not signifi-cant. There was no breaking news in the US and hence In-dexes stayed calm. Most of the common stocks are in re-covery. As shown in the up/down ratio, the percentage of up stocks was over 60%, which means the atmos-phere this week is optimis-tic.

However, the frequency of the number of down days with volume increase was high meaning the effect of prior sell-off is not over. In-vestors should stay alert.

HSCEI slides with Hang Seng Index Hang Seng Index starts declining

With 10 years of trading experience, our writer is an active investor. He is currently managing 800k of equity.

Borizon

WINNING INDUSTRY

Automobile

Owing to the recovery of domestic consumption and the GDP growth acceleration, it is expected that the spending on luxury items will be higher. Due to the consistent growth in car sales and the sig-nificant improvement of its pros-pect, the automobile industry has been leading the market in the past 6 months. Now, they even reach a new high during the de-cline of major indexes.

Geely (00175), the privately owned motor manufacturing firm, built a ‘base on base’ pattern and recently broke out from it. Great Wall (02333) rose for 4 weeks in a row from $23 to $32 and achieved a 40% gain. It is now in consolidation. Smart Investors should focus on these leading stocks.

Geely (00175) finishes its consolidation

Great Wall (02238) attempts to make new high

16 FEB 2013

“Our market timing model for HSI shows a ‘Neutral’ signal while HSCEI shows a ‘Downtrend’ signal. Downside risk is higher than 2 weeks ago and the probability of starting downtrend is 65%. Risk-to-award ratio is NOT favorable to investors so investors should convert as many positions as possible into cash. Please observe the density of ‘sell-off’ days. Prepare cash for the next trend.”

Joseph Lau

Borizon Ranking

Geely (00175):

Great Wall (02333):

DongFeng (00489):

Brilliance (01114):

GAC (02238):

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