Even nowadays, then most China companies are exploding (especially stock prices), we may find really hidden gems that are worth a closer look. While wave count displays some cautions it’s ready for your watchlist.

Company profile

The Company, together with its wholly owned subsidiaries, is a pharmaceutical and Traditional Chinese Medicine company which develops, manufactures and commercializes both plant-based pharmaceutical and plant-based nutraceutical products.

Elliott Wave Analysis

American Oriental Bioengineering is very successful stock and has made beautiful gains during previous 3 years. It was riding crazy rollercoaster. If you are adrenaline junkie you may join the ride and multiply your portfolio’s value. Great fundamentals of AOB caught my attention and I started to label Elliott Waves for this stock. As we see on a weekly closes chart this stock has started new wave cycle. Now AOB almost reached its 2/3 of major wave cycle.  

 Short term:

Looking at daily price chart you can see that from September lows the stock has made huge impulsive three wave rally to over 13 price mark. Minor wave 3 was very strong, it used all the strength of current bull market. While it’s in 5 minor of v intermediate wave of 3 major wave it’s heading to the top. I expect that stock will top at around 21.5. It also could happen that minor wave 5 will be extending and would reach even higher highs.

Medium term:

Medium term count displays possible top of intermediate wave v at 21.5. At the moment stock price has some space north till it tops, but it can happen very fast, so be cautions. 

Long term:

Please note huge price swings during the last few years. Impulsive waves kick in hard, but the corrective ways retraces most of the gains. It is interesting stock for short term traders, but the risk is very high. Major wave 3 is should top at 21.5 after that major wave 4 will retrace most of the gains.

Conclusion:

 This company has very good prospects for it’s business and future stock price. It will definitely make you stress about price swings, but it could be nice gem in your portfolio.  

Disclosure: Author does not have a position in AOB.

Tags: AOB, elliott wave

This entry was posted on Monday, October 22nd, 2007 at 9:54 pm and is filed under China. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.