China Cache Looking to Breakout

While the US tech sector its a rough patch, some Chinese tech stocks like China Cache (CCIH) are looking very bullish technically. Networking stocks like F5 Networks (FFIV) and Riverbed Tech (RVBD) along with just about all of the optical equipment stocks and even the US CDN leader Akamai (AKAM) have fallen below the 200ema. Typically this is a very bearish sign especially if the 20/50emas dip below the 200 as well.

CCIH on the other hand has regained the 20/50ema. The 200ema isn't active yet since the company hasn't been public that long.

CCIH is the leading CDN provider in China, but has dropped dramatically from its post IPO high near $35 all the way back in November. Along with the general weakness in the Chinese market that started back then, they also faced the scare that the COO leaving signaled internal issues at the company. Based on the Q4 results those issues were put to rest and the stock has been basing since then.

From looking at the chart below it appears that is CCIH can break above $22 then the stock could run back to previous highs.

Disclosure: Long CCIH, RVBD in client and personal accounts. Please review disclaimer page. Mark is not a technical expert and this information is just provided for informational purposes.


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