Groupmark China Index

The Groupmark China Index moved sideways this week on low volume but the internals continue to deteriorate.  The three charts below show the index performance, the advance decline line, and the number of stocks trading above and below their averages.

The index gained almost no ground this week but the advanced decline moved into recent new low territory.  This increases the odds of a continued corrective phase.

This chart below measures the number of components trading above and below their moving averages and shows the number of companies trading below their 20 and 50 day averages increased this past week.

For further clarification of the above chart, it measures the stocks in the Groupmark China Index trading above or below their moving average.  The thickest green line measures stocks trading above their 200 day average.  The thinest green line measures stocks trading above their 20 day average and the green line in the middle measures stocks above their 50 day average.  The red lines measure stocks below their averages with the thickest being a 200 day average, thinest a 20 day average, and the middle a 50 day averages.

The Groupmark China Index blog and website were created for investors to monitor the general health of Chinese companies trading in the U.S.  Groupmark welcomes your comments.

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Over the 2 last weeks we have seen the number of stock that were trading above there 20, 50 and 200 day moving average drop significantly while the index holds close to recent highs.
Stocks above their

This could signal the start of a correction for the index.  What would confirm the potential correction is a turn in index below the 20 day average of 2239.47.
Here’s a list of stocks that recently turned below the 20 day average in the last 9 trading sessions.

BJGP BMP Sunstone Corp
ATAI ATA Inc
HRAY Hurray! Holding Co Ltd
XIN Xinyuan Real Estate Co Ltd
WH WSP Holdings Ltd
CEDU ChinaEdu Corporation
FEED AgFeed Industries Inc
SMI SMIC
GIGM Gigamedia Ltd
STV China Digital TV Hldg Co Ltd
ATV Acorn International Inc
CBAK China BAK Battery Inc
YTEC Yucheng Technologies Ltd
SOL Renesola Ltd
ASIA Asiainfo Holdings
GU Gushan Environment Energy Ltd
GSI General Steel Hldgs Inc
HQS HQ Sustainable Maritime Ind
VISN VisionChina Media Inc
CHINA CDC Corporation Class A
VIT Vanceinfo Technologies Inc
APWR A-Pwr Energy Generation Sys
GRO Agria Corp
CEU China Education Alliance Inc
LTON LinkTone Ltd. ADS
HOLI Hollysys Automation Tech
JASO JA Solar Holdings Co Ltd
YGE Yingli Energy Hoding Co Ltd
CHNR China Natural Resources Inc
JRJC China Finance Online Ltd ADS
CHME China Medicine Corp
RINO RINO International Corp
QXM QIAO XING Mobile Communication
WATG Wonder Auto Technology Inc
CSUN China Sunenergy Co Ltd
LDK LDK Solar Co Ltd
SOLF Solarfun Power Holdings Co Ltd
TSL Trina Solar Ltd
CEA China Eastern Airlines ADS

One of the leading groups in the index, Solar Power Companies seem to be correcting, as well as other energy related names.  Keep an eye of all the stocks moving above or below their averages here. http://alturl.com/aioc

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The Groupmark China Index financial sector rose 24.9% for the month leading all other sectors.  The leading stocks in the financial sector were CNinsure Inc ADS (CISG) and China Finance Online Ltd ADS (JRJC). The broader Groupmark China Index rose 7.66% for the same period.

CNinsure Inc. ADS (CISG) operates an independent insurance intermediary company in China. It provides insurance claim adjusting services, such as assessment, survey, authentication, and loss estimate to individuals and institutions.

For the three months ended 31 March 2009, CNinsure Inc’s revenues increased 58% to RMB215.9M. Net income increased 30% to RMB45.5M. Revenues reflect an increase in commissions & fees income and higher other service fees. Net income was partially offset by a rise in commissions & fees expenses, higher selling expenses, an increase in general & administrative expenses and a decrease in interest income.

China Finance Online Ltd Ads (JRJC) China Finance Online Co. Limited, provides online financial and listed company data and information in China. The company provides various services on a single information platform that integrates data and information from multiple sources with features and functions, such as data and information search, retrieval, delivery, storage, and analysis.

For the three months ended 31 March 2009, China Finance Online Co. Limited’s revenues increased 6% to $11.8M. Net loss totaled $128K vs. an income of $3.5M. Revenues reflect growth in subscription service fees from individual customers and institutional customers. Net loss was offset by an increase in general & administrative expenses, higher sales & marketing expenses and a rise in product development expenses.

The top 5 sectors in the Groupmark China Index for July are;

• Financial + 24.9%
• Conglomerates 22.3%
• Consumer Cyclical 18.1%
• Technology 13.3%
• Basic Material 12%

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The coming fourth of July holiday seems to be taking a toll on the volume this week.  Although the index has recovered back above it’s 20 day average the volume has been unimpressive.  The 50 day volume average has been steadily increasing since May 2009.  Tuesday and Wednesday this week have been the only two days in a row that the volume has been below the average.  Thursday is shaping up to be day number 3.

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Groupmark has launched the Groupmark China index website.  (www.groupmarkchinaindex.com)  This site was designed to help investors discover undervalued Chinese companies trading in the U.S.  The index is comprised of over 150 companies that generate most of their revenues inside China.  The index is calculated differently then most indexes.  Instead of a traditional market cap weighted index, this index is weighted to emphasize the fasting growing companies with the lowest the evaluation.  The new website has many technical indicators for investors to discover undervalued companies, including; percent gainers and losers, advancing and declining issues, as well as, companies that start to trade above, or below, their 20, 50 and 200 day moving averages.

Please give us feed back on the site.

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The Groupmark China Index continues into new high for this bullish phase.   This move negated the concern of the two reversal days.  In our last post we talked about support at 1444.56, which was not tested before the index went into new high territory.

Another positive indicator was the advance decline line pushing into new highs confirming the new high in the index.

Our index also is outperforming the S&P 500.

All our indicators will be available shortly on GroupmarkChinaIndex.com

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