These Stocks Are Trade War Winners

Everyone’s supposed to be freaking out about a growing trade war with China. Stocks are dropping and analysts are scrambling to figure out which industries and stocks could suffer the most during an ongoing trade dispute.

Trump threw another rock at the hornets’ nest last night as he threatened up to $400 billion in new tariffs on Chinese goods. Futures are tanking this morning as the market attempts to digest the news. Meanwhile, Chinese shares suffered their worst close in two years, MarketWatch notes.

Just don’t tell Chinese stocks listed in the US…

Chinese names listed on American exchanges are some of the fastest-moving stocks on the market right now.

I know that might feel counterintuitive. But it’s true. Despite the endless trade war rhetoric dominating the airwaves, China ADRs have offered up some amazing trading opportunities for anyone who could stomach the volatility.

We’ve traded in and out of these speculative Chinese stocks multiple times over the past 18 months. Last year, we even joked that our trading portfolio was beginning to look like a Chinese embassy.

If you’ve followed along, you already know that we booked a fast 50% gain on Momo Inc. (NASDAQ:MOMO). Alibaba (NYSE:BABA) was another solid winner from our trading portfolio last year. We cashed in our chips on this trade in early May for a gain of 23%. Then there’s 58.com Inc. (NASDAQ:WUBA), the Craigslist of China. This stock exceeded our wildest expectations when we jumped into a trade last summer. After beating earnings expectations, shares rallied double-digits and didn’t look back. We unloaded the trade for gains north of 50%.

Back in March, we alerted you to another powerful run shaping up as many of these Chinese ADRs started to break out above their respective consolidation zones. We even jumped on the Chinese search engine Baidu Inc. (NASDAQ:BIDU) for a quick flip.

But the trade didn’t turn out as planned. We were stopped out for a loss just a couple of weeks later. Now it’s time to make up for the fumbled trade. The market’s offering us another stab at these fast-moving stocks as some fresh names rip to new highs.

iQIYI Inc (NASDAQ:IQ) just debuted on the Nasdaq this spring. It’s China’s most popular video streaming service. And investors are going wild for the stock. Shares have more than doubled over the past four weeks.

If IQ’s blistering gains aren’t enough to impress you, check out Huya Inc. (NYSE:HUYA). Huya is another Chinese streaming play (this time it’s video games, not movies). Huya stock just hit the market. It opened below $16 per share. It’s now trading above $45. That’s an increase of more than 200%…

streaming

Are these two stocks getting a little frothy?

Absolutely.

But these Chinese tech stocks are also generating more than their fair share of bullish headlines. In fact, IQ just scored excusive streaming rights to all four major PGA tournaments. The rights to broadcast the most popular events in golf to the entire Asian nation is certainly nothing to scoff at — and should become a major revenue source for the growing company.

Of course, we’d be fools to think these stocks could continue to deliver these extraordinary gains without shaking out the weak hands. That’s why it’s important to think of these momentum movers as short-term trades only. Don’t get emotionally attached to the story. Grab the gains and run!

Sincerely,

Greg Guenthner

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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