A Reversal for China Unicom (Hong Kong) Limited (ADR) Is Not Near. The Stock Gaps Down

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The stock of China Unicom (Hong Kong) Limited (ADR) (CHU) gapped down by $0.24 today and has $8.40 target or 37.00% below today’s $13.34 share price. The 8 months technical chart setup indicates high risk for the $31.95 billion company. The gap down was reported on Oct, 20 by Barchart.com. If the $8.40 price target is reached, the company will be worth $11.82B less.
Gaps down are helpful for identifying a resistance level and to could also be used as a tradeable event. If traders are short the stock and it experiece gap down, then its usually advisable to hold the short for a bigger down move. Back-tests of such patterns show that two-thirds of the these patterns the stock performance worsens after the gap. The area gaps close 91% of the time, the breakaway gaps 1%, the continuation gaps 9% and the exhaustion gaps 64%. The stock is down 1.98% or $0.27 after the news, hitting $13.34 per share. About 120,609 shares traded hands. China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU) has declined 11.05% since March 17, 2015 and is downtrending. It has underperformed by 9.09% the S&P500.

Analysts await China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU) to reports earnings on October, 22.

Out of 2 analysts covering China Unicom (NYSE:CHU), 1 rate it “Buy”, 0 “Sell”, while 1 “Hold”. This means 50% are positive. China Unicom was the topic in 2 analyst reports since July 31, 2015 according to StockzIntelligence Inc. Jefferies upgraded the stock on August 24 to “Buy” rating.

According to Zacks, “China Unicom Limited is engaged in the provision of cellular, paging, long distance, data and internet services in the People’s Repulic of China.”

A Reversal for China Unicom (Hong Kong) Limited (ADR) Is Not Near. The Stock Gaps Down

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