CNTF is a solid company on paper but I’ve never been to China to confirm. Shares were recently trading just below $7 and the numbers seemed so good I figured we’d see $10 in the short term.
Not willing to chase a stock though, I always wait for a pullback and make my entry at support. So for the last two weeks I’ve been bidding $5.05 on CNTF waiting to get filled.
Now I don’t like to toss a lot of bids in for the risk of getting filled on bad news but that’s exactly what happened to me yesterday when CNTF tanked on what is believed to be a margin call for China stocks.
The company tried to offset the massive sell off assuring investors by reiterating the Q2 outlook and some upcoming big news but it was only enough to stall further collapse.
A situation that ruined my day to say the least. Friday’s close was $5.28 and it showed now signs of breaking down like it did. So when E*Trade Pro alerted my $5.05 order had been filled I was initially excited having not seen any reason for the small $.30 cent pullback.
But it didn’t take long before I was down big and scrambling for the door. I hate being in a position not knowing what’s causing the drop so I had no choice to take a loss around 6% just under $4k.
There still isn’t any news as to what caused this massive sell off, some speculate it was a margin call on China stocks due to stiffer rules but I’ve yet to confirm that.
The lesson you can learn here is that if you’re going to sit on the bid and wait for shares, be careful not to get caught in a sell off like I did.