China Ceramics Co Ltd (NASDAQ: CCCL) is having an overwhelmingly strong start to the trading session this morning. However, the company has released no news. At the end of the day, the run upward looks like it’s being caused by nothing more than traders looking to make a quick profit. However, moving forward, these gains aren’t likely to last. Today, we’ll talk about:
- Why the gains aren’t likely to last;
- what we’re seeing from the stock; and
- what we’ll be watching for with regard to CCCL moving forward.
CCCL Runs For The Top But Gains Won’t Last
As mentioned above, China Ceramics is having an incredibly strong start to the trading session this morning, but the company has released no news. Digging into technical indicators, it becomes clear that the run is caused by nothing more than traders trading. However, the stock’s gains simply aren’t likely to last long. Not because of their activities, but more because of macro-economic news.
The big issue for CCCL and other Chinese stocks has to do with an economic slowdown in the region. Unfortunately, recent data from a private sector survey showed that manufacturing activity in China is contracting. This is the first time that we’ve seen this in more than a year and a half.
The data came from the Markit Manufacturing Purchasing Managers’ Index, or PMI for December. During the month, the figure dipped to 49.7, falling from 50.2. Any PMI under 50 shows a contraction in manufacturing activity. At the end of the day, Chinese stocks are a point of concern at the moment as the Chinese economy continues to show signs of struggle. Moreover, the trade war between the United States and China isn’t helping CCCL or other Chinese companies. All in all, the climate surrounding these companies is a poor one. So, while traders are having fun today, we expect that the gains will reverse relatively soon.
What We’re Seeing From The Stock
Ultimately, with traders taking the bull by the horns here, China Ceramics is having a great day in the market today. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:49), CCCL is trading at $1.98 per share after a gain of $0.45 per share or 29.41% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on CCCL and other Chinese equities. At the end of the day, while the company is seeing strong gains in the market today, we believe that economic blues in the world’s second largest economy will lead to declines in the near and potentially long term. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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