China Digital Breaks Out on High Volume
China Digital Communications Group (CMTP) shares broke out from a technical channel on higher-than-average volume, as investors remain bullish on the company’s prospects.
China Digital Communications Group [[CMTP.OB]], which manufactures and distributes lithium battery shells and related products in China, saw its shares jump more than 20 percent after breaking out from a technical channel on higher-than-average volume. Meanwhile, investors remain bullish on the company’s long-term prospects ahead of earnings.
Here is the technical analysis supporting the move:
Last quarter, China Digital recorded net income of $489,654, or $0.01 per share, on revenues of $2.63 million. Meanwhile, the company’s balance sheet remains very healthy with a current ratio of 3.56 and more than $10.1 million in cash and cash equivalents on its books. Investors are betting that these results will continue going forward as the Chinese market matures.
In the end, China Digital broke out on a strong technical move, while long-term investors are still bullish on its strong earnings and cash position. Whether or not the company will be a good long-term play will depend its ability to improve its top and bottom line, but today’s move makes this stock one worth putting on the radar going forward.
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