New buy: EJ

EJ.  EJ owns 75 of LEJU, which it spun off.  It is trading less than LEJU's value and cash.  The market got skittish on Chinese housing stocks but recently there have been positive developments.  I see a double bottom with a handle now forming.  Earnings have grown over 170% this year.   8X future earnings. 

Entry: $9.79

Stop: $9.00  R.75%

LEJU closed

I closed the remainder of my Leju position out today when it broke 12.  Today presented a big red bar. Under the right circumstances, I could  have tried to ride out the move since I had already reduced my position by 1/2 and hope for a reversal. I elected not to do so because  SFUN (which I sold yesterday), a competitor of LEJU absolutely got hammered today--over 7%. If other stocks in an industry get hammer it is best not to see if your stock is the sole survivor.   Leju held up for most of the day, but 12 ultimately caved as well. 12 was my mental stop.  After I sold LEJU quickly dropped to as low as 11.51. 

 Summary: in at 10.65 (5/13).  Out 1/2 at $11.91 (5/28) Out  1/2 $11.90 (5/30) for an 11.83% gain.

 No regrets about this trade. My analysis when I entered is here.   Although earnings were great it is a thinly traded stock that I don't want to wait for it to make its move.  This stock is more than capable of very quick sell-offs as it is of big gains.  Note the severe sell off earlier this month.  If it is not actively being pushed up it could fade just as fast. So did I gamble a bit on earnings? Absolutely, but I was rewarded with that big green bar and a nice profit on the trade.  

Current position summary.

Longs:

SFUN  Looking very nice.  Bought at 11.23 average.

Leju: Bought at 10.65.  The recent Ipo trading history is short but it has come back with a vengeance after an IPO flop? It great earnings and pickup 3 more analysts all with buy ratings.  Ideally, I would like to see consolidation and the 12 hold.  

HCLP this one has been on fire average price 38.88 (not including the dividends)  Probably a bit overheated and a pull back might be needed. I would love to just let this one ride for the year and take a long term capital gain. 

RFMD: Another melt up type stock.  In at 7.48.  Unfortunately,  I reduced my position size by 20% on that big red bar (for a small profit) in April.  Since May this has been off to the races.

NOK Average $4.43 This was my star of last year.  After a lot of consolidation between 8 and 7 NOK looks poised for another run if it can get past 8.  It's picked up some price targets and announced a share buyback  and a .51 dividend.  (we'll call that a reward for my patience after they cut the dividend shortly after I bought)  Obviously, this has paid off well for me and I want to see what it can do now that it is free of the handset division.

MCD: Avg. $100.28  continues to put in a nice little trend.  Slow and steady.  The 20 MA has acted as support.  If the market stays strong I would expect the next leg up to 104-05. I have no big expectations here, but it's a nice place to park some cash 3%+ dividend.

GFA: the dog of the group avg. 3.42 The breakout failed (or is failing?)   I was hopeful that the Brazil Rally would move this up and it had looked ready to breakout.  And then it went the opposite direction.  I cut my position size by 1/2 today and will dump the rest on close below 3.  Just under a 1R loss right now.   EWZ and many of the leading Brazillian stocks recently sold off.  Hopefully they can catch a bounce.  If not there's R. I. and C. of the Brics

SHORTS:
YOD This is what I love to see on a day after I take a short position.  -12.69% the next day. If only every trade worked on this well.   I anticipate as volume dries up this will drift lower.  There are likely people that bought the billionaire news at 3.20 or higher who are now trapped and when they capitulate YOD should see new lows.

New Buy: Leju

Leju was a recent IPO that had a tough time shortly after beginning trading.  I believe there was a "wash out" this past week and bought today at  $10.65 as it has regained strength.  The catalyst today was an analyst outperform rating.  I believe a break above 11 will trigger the next run up and we are within striking distance. I want to be in before the break as I find it best for risk management.  Stop is at $9.45 which is the lowest close for this stock.

Fundamentals:  

positives:

Exclusive deal with Zillow.
Exclusive right to sell to Bidu
Exclusive advertising agent for SINA
15% ownership  (180 million stake) by Chinese internet giant Tenecent.
over 60 million users.
335 Million in revenues (2013) 96% growth from 2012.
Tiny 14 Million float.
Profitable -- 10 Million (2013) up from a loss of 63 Million in 2012.
Leju just picked up its first analyst, who initiated coverage at "outperform" and a price target of 15.

Negatives:
It's a Chinese company
Possible Chinese housing slow down.
180 Million shares outstanding (huge in comparison to float)
presently has low volume
Insider lock-up period expires in October 2014. (could be a positive depending on time frame).

Sfun -- A Competitors provided Disappointing guidance.

While SFUN beat earnings it provided lower guidance.  This is probably the biggest negative. As it may suggest that the entire sector is slowing down.  On one hand, this is a negative for obvious reasons.  On the other hand, it may be a positive as it reduced expectations for Leju, which reports on May 20.

Given the trading volume as of late and volatility this trade makes sense only with a wide stop and small shares.  1 R at most.