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Most volatile China stocks in February

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updown_1 February 7, 2014 (Chinavestor) After the best market day in 2014 just yesterday, the time has come to assess which Chinese stocks are just volatile and which are vulnerable in general. The Dow Jones Industrial Average (INDEXDJX:.DJI) surged as much as 188 points on Thursday, the best such gain for the year so far. And we have seen the worst day just a few days earlier on Monday when the Dow fell 330 points. Based on two opposite market days, Baidu Inc. (NASDAQ:BIDU) is the most volatile stock followed by SouFun Holdings (NYSE:SFUN), Sina Corp. (NASDAQ:SINA) and CNOOC Ltd. (NYSE:CEO).

NetEase Inc. (NASDAQ:NTES) is the most vulnerable China play followed by WuXi Pharma (NYSE:WX) and Ctrip.com Int. (NASDAQ:CTRP). 

For the record: when the Dow fell over 300 points on Monday, Baidu Inc. (NASDAQ:BIDU) fell the hardest by far. See first chart of this article. BIDU was followed by Sohu.com Inc. (NASDAQ:SOHU) as well as SouFun Holdings (NYSE:SFUN). WuXi Pharma (NYSE:WX) and Ctrip.com Int. (NASDAQ:CTRP) recorded significant declines as well as WuXi Pharma (NYSE:WX). When market sentiment is negative, these stocks are vulnerable. This is the bad news.

Good news is that when the market recovers, so does Baidu Inc. (NASDAQ:BIDU), among others. See second chart.

mover_20140203

After the 300 plus decline of the Dow Jones Industrial Average (INDEXDJX:.DJI) on Monday, we saw 188 points advance on Thursday, February 6th. Which stocks did best? SouFun Holdings (NYSE:SFUN) advanced the most followed by CNOOC Ltd. (NYSE:CEO) and Baidu Inc. (NASDAQ:BIDU). It is important to point out that Baidu Inc. (NASDAQ:BIDU) not only had a strong day on Thursday but bounce back earlier the week after a steep fall on Monday.

Back to the chart below. Besides SFUN and BIDU, CNOOC Ltd. (NYSE:CEO) came back strongly as well as did Sohu.com Inc. (NASDAQ:SOHU) and Home Inns & Home Management (NASDAQ:HMIN).

What's missing is a comeback from NetEase Inc. (NASDAQ:NTES), WuXi Pharma (NYSE:WX). Ctrip.com Inc. (NASDAQ:CTRP) is missing as well, a stock that was unable to recoup earlier losses.

mover_20140206

Based on these two completely different market days, it is safe to say that Baidu Inc. (NASDAQ:BIDU) is the most volatile Chinese stock. When the market falls, so is BIDU but when it recovers, Baidu Inc. (NASDAQ:BIDU) comes back strong. SouFun Holdings (NYSE:SFUN) and CNOOC Ltd. (NYSE:CEO) has the same trading characteristics.

Unlike those stocks, NetEase Inc. (NASDAQ:NTES) and Ctrip.com (NASDAQ:CTRP) lack momentum when the market is strong. This is bad news. Investors should watch out for these two.



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