China’s SORL Auto Parts is usually a great seasonal play at this time of year. September through November are the strongest 3 consecutive months of the year for SORL stock.

SORL seasonal chart

The chart of SORL looks like a beautiful setup.

SORL daily chart

The MACD looks like it’s starting to round up. The Twiggs Money Flow is still negative which suggests the stock could chop out sideways for a bit longer. The large players volume looks weak and we see no evidence that large players are stepping in to buy SORL stock.

Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at $4.85. Right above this resistance zone may be a good entry point. There is a support zone below the current price at $4.68, a stop order could be placed below this zone.

SORL trades at a P/E of 3.4 and a Forward P/E of 3.

Revenue has grown by an incredible 46.38% in the past year.

Measured over the last 5 years, revenue has been growing by 17.23% yearly.

The company is on track to do $460 million in sales in 2018.

Sorl Auto Parts issued its earnings results on August 14, 2018. The company reported EPS of $0.35 versus the $0.29 estimate. Revenue also crushed estimates, coming in at $128.51 million versus the $106.44 million estimate.

Everything is great, right? Wrong. I bought this stock for a swing trade last week and took a loss. It has continued to fall to levels so low that the P/E is actually broke.

Before you invest your hard earned money in any Chinese ADR, you need to be aware of the dangers and watch the documentary The China Hustle.

Here is a trailer for the movie The China Hustle:

I highly recommend that you rent this movie for $3.99 and watch it today before you consider investing in China. You can rent it and stream it on your favorite platform here:

I’m not adding SORL to a long-term buy and hold portfolio on because it’s China and the P/E has fallen to levels so low that it could suggest something is seriously wrong with this company. How do we really know what’s real about their financials and has anyone been to China and actually checked out this company?

China, U.S. corporations, and the mainstream financial media were instruments of massive fraud against amateur investors in the U.S. Make sure you watch The China Hustle to learn more. You’ll probably never buy another Chinese stock again.