We're no longer so enamored of this stock. We reentered earlier this month and exited in deference to PWRD, which appears to have taken over leadership in the space. We didn't like how NTES moved back above resistance on such light volume.
But yesterday NTES bounced with authoritative volume off its 50 MA and so we came into today's session intrigued. After all, NTES has been a leading stock. It's major technical problem is that it has come a very long way without stopping to form a proper base to recharge. Even now the formation it is trying to break out of is only in the midst of its seventh week. And its relative strength line is lagging.
Despite all of this we are unwilling to ignore what has been a powerful stock at a key resistance point. We are thus taking reentry in this stock this AM north of $45.50 as price moves back above a downtrend line that connects the August and September highs. We suggest using a stop below $44.
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