Friday, December 10, 2010

SNP Looks Weak

China Petroleum and Chemical Corp., China's state owned oil and chemical company is really struggling, and the chart is showing the pressure.  China's input costs are surging, thanks to their insistence on pegging their currency to ours.  Their reasoning is to maintain export competitiveness with us, alas there is no free lunch however and their raw material prices are soaring, but the Chinese government cannot allow these prices to flow through dollar for dollar (or yuan for yuan) so the margin pressure is building.  I think the chart is reflecting that compression.  It has filled that gap, now awaiting further weakness to enter short.

I want to point out some other weak stocks (no time to place the charts now), SMG, GOD, NEM, and BVN.  However TNH and FTI are looking interesting as long candidates.

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