Leju Holdings Limited, through its subsidiaries, provides online-to-offline (O2O) real estate services in the People’s Republic of China. The company offers e-commerce services that comprise selling discount coupons and facilitating online property viewing, physical property visits, and pre-sale customer support for new residential properties and home furnishing sales through jiaju.com and leju.com. It also sells advertising on sina.com and baidu.com, which are new residential properties and home furnishings Websites operated by the company, as well as acts as an advertising agent for sina.com and other non-real estate websites.
Take a look at the 1-year chart of Leju (NYSE: LEJU) with the added notations:
Outside of the July-August rally, LEJU has been trading sideways since it IPO’d. In addition, since the beginning of August, the stock has found support at $12 (red) whenever that level has been approached. Now that the stock is there again, traders should be able to expect some sort of bounce. However, if the $12 support were to break, much lower prices should follow.
Join our new Linkedin Group by clicking the link below:
The Tale of the Tape: LEJU has a key level of support at $12. A trader could enter a long position at $12 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach