I am shorting shares of NetEase Inc (NASDAQ:NTES) simply based off valuation metrics and the stock chart. Both confirm a drop is pending within days. First, the stock is up from $130 in February 2016 to its current price of $270. This is over a 100% gain in 2016, an epic move no matter the stock. The next factor is more specific to the trading recently, which shows institutions unloading. On October 14th, 2016, NetEase Inc shot to a new all-time high of $272.50 before reversing sharply. This formed a topping tail on the daily stock chart. Every day since, the stock has gone sideways and floated, never taking out the topping tail high of $272.50. This shows epic distribution (selling) by smart money and sets the table for a big fall. The downside is big, a simple retrace netting investors a drop to $208.00, or over at 20% correction. Check out the stock chart below and see the trade.
I post my live trades on VerifiedInvesting.com
I post my live trades on VerifiedInvesting.com