I really like the potential of MOBI, a Chinese Growth Stock and an IPO as of 12/10/10. I found out about MOBI through MarketClub’s Powerful Chart Analysis and Smart Scan Tool. Some Chinese stocks have taken big beatings in late 2010 and early 2011 as there have been some issues with their accounting and business practices (ie. CAGR). However I do not think this is a reason to paint all Chinese stocks with the same brush stroke.
MOBI is in the mobile applications space which is currently a very high growth area. The mobile internet applications market is a great growth sector and probably even more so in China.
The Sky Mobi investor section of their website describes their business as:
Sky-mobi Limited (Nasdaq:MOBI), operates the leading mobile application store in China. We work with handset companies to pre-install our Maopao mobile application store on handsets and with content developers to provide users with high quality applications and content titles. From January 1, 2007 to September 30, 2010, Maopao had approximately 479 million cumulative users. Over the same period, we offered over 770 applications and over 61,000 content titles and the cumulative number of downloads reached 3.6 billion.
MOBI has a very small float in the 7 million share range. This means that this stock can move very fast and since it is an IPO there is no previous resistance in terms of the price trend.
I really think MOBI has a good shot at getting to 20 dollars close to double the current price range. This stock has the growth, the market and the sector that are very favorable.
Important to be aware of on MOBI is that the Lockup Expiration is 6/8/2011. I would definitely not want to be holding shares maybe in the month before that date as there is typically a large down draft in the shares anticipating the expiration of lockup.
I was going to write up this post today when MOBI was up about 12% but then it started to really take off and I realized it would not make any sense to write up anything until the close. As it turns out the close was very strong on some new news today on a deal with SOHU.
MOBI had a huge move today on record volume that pushed the stock to new all time high. This is classic breakout action and confirmed volume. From here I see two possibilities.
- Tomorrow 3/24/2011 MOBI starts the day with a downward retracement perhaps to either the 11.20 or 10.90 range. That retracement would serve as an intra day retest of the recent breakout area and would be ideal entry levels for MOBI in my opinion.
- Option two is that MOBI starts tomorrow with another strong up candlestick similar to what was seen in mid to late January 2011. If this occurs it makes it much more difficult for an entry. Chasing a stock is never a good idea. If that occurs then waiting for a 3 to 5 day retracement is probably the best approach.
MOBI is so strong right now that I suspect it will not be able to manage much more of a pull back than 11.20 tomorrow. There really should eventually be some type of retest of the 11.20 range. Whether it is tomorrow or 5 days from now I do not know, but it would be normal classic Wyckoff retest action
MarketClub’s Chart Analysis Tool gives MOBI Max Positive Ratings:
SKY-MOBI ADR (NASDAQ:MOBI)