The haunted town

The most talked about and wondered share this week got to be China New Town. Somehow it is coming down, regardless of market sentiment. It finished the week with all time low, even though, other china shares rebounded.

Does market know something that we don't know? Yes or no. From my experience, sometime market does know. Sometime, it is just speculation or false alarm.

Does big boy(house trader/rich guy) really have big control over the share price? I am not sure. I am not exposed to how those people work. However, judging from the huge volume and many outstanding shares. It is not easy to "manipulate" it.

Is the hedge fund selling? Possible. Some source claims that hedge fund is selling. To close position for the year? Or to benefit from the short selling? Not sure either.

Could the following news trigger it? Possible, but I failed to see the direct relation. Because the core business is in developing town, compare to selling house.
- "The growth of apartment prices in China is set to fall in 2008 because of an expected increase in supply and a drop in speculative activities," said Chen Sheng, deputy director of the CIA, which tracks property prices." Source

Although I am impressed with the business prospect, but beware of the short term "perceived" risk.

• Avoid catching the falling knife. This is really an old wisdom already. Since down trend is coupled with high volume. It is best to avoid now.
• No formal valuation has been established. In the prospectus, they have already mentioned this. Since there is no suitable comparison, it might be hard to value the company. I suspect analyst report is on the way, just watch out for it. Of course, as you might have guessed, analyst would say buy. Target price? Who knows.
  
• Fund manager is on holiday. I think the fund manager who support this counter and think it is well worth the money might be on vacation right now. Support could come in when the holiday season ends.
• A positive 4th quarter is essential to show everyone that it is good.
  
• Consider taking the risk, when the volume die down. No volume means no interest. That also means it could be at the bottom already. This is on the assumption that no further bad news would be revealed.

I would wait for the low volume or new catalyst. It is impossible to catch the bottom. Nobody knows that is the bottom until you experienced it. Remember today's closing price - 0.455. Who knows 1 year later, you might be regretting "Aiyah, I missed the 3 bagger!"