Other than an auditor change last week, and the general market for Chinese stocks in the past 2 weeks I don't see an obvious reason for the continued weakness; perhaps a lot of "hot money" hands piled in - and as the stock reverses they are hitting the exit door en masse. Either way we had already cut the position down to 1%ish as the stock weakened and kicked in some stop losses much higher. Now that the stock has broken the 50 day, we have to remain disciplined no matter what the thought process on the fundamentals and slash to the bone.
The only question is whether to sell completely or keep a 0.1% stake. I've decided on the latter only to make sure this name remains on the radar. The irony would be if the company has a blowout earnings (as they've projected) and the stock pulls one of those +20% gains overnight, but that's part and parcel with the Wall Street game so we'll protect capital first and watch what happens. There is a huge air pocket between the $16s and the 200 day moving average (near $10!)
We're selling this batch of 0.8% exposure for a horrific 23% loss, near $16.20.
Long Telestone Technologies in fund; no personal position
