New Buy:(FUQI)

I made a new purchase today with an initial buy of (FUQI) at $11.75.

This stock appeared on my high relative strength screen and I was impressed with the massive volume the stock has seen as it's exploded out of the right side of it's base. It's now the top industry group in IBD.

I have to admit though that the chart is ugly. I'm reading it as a nine month cup with an $11.75 buy point, but it could also be seen as a double bottom with a $7.99 buy point. The stock has never traded over $11.95 and if it can break that level has no over head resistance. That said, the chart is deep and the stock has made a massive move in a short time. Not only that, it's a small cap and a Chinese ADR. These factors point to high volatility and with my 5% stop losses I don't have much room. The stock closed a few percent below my purchase price today, so there's a good chance I will stop out tomorrow.

If I do I will continue to keep an eye on this stock though - I'd like to own it if it gets above $12 a share.

Market action was good today. The distribution days are still out there and it's hard to read much into a holiday trading week, but the Nasdaq retook it's 200 dma and the S&P 500 is getting close to that level too.