What Kate Stalter says about CTRP

Ctrip.com By Kate Stalter
Posted 11/25/2009 02:22 PM ET


Chinese travel agency Ctrip.com (CTRP) recently cleared a long cup-with-handle pattern. After making a strong upside move, it appears to be consolidating gains well above its 10-week average.

•CTrip.com is a mid-cap. It trades a million shares a day.
•Fund ownership has grown in each of the past two quarters, a good sign of support from professional investors.
•Funds own 27% of shares, a healthy number.
•CTrip’s Earnings Per Share Rating is 99. Quarterly profit growth accelerated in the past three quarters.
•Return on equity is excellent, at 35%.
•Its group, Leisure-Services, continues to be a strong performer.
•CTrip has an outstanding Composite Rating, 99.


Chart Analysis
•Emerging from its bear-market correction, CTrip made several successful pullbacks to its 10-week average (Point 1). None of these, however, were long enough to constitute proper bases.
•Its most recent pullback (Point 2) could be viewed as a handle to a long cup-shaped pattern that began in May 2008 (Point 3).
•However, the handle was somewhat flawed, correcting about 16%, a little more than you see in an ideal handle.
•It cleared the high of that pattern (Point 4) in heavy volume earlier this month, after a better than expected third-quarter earnings report.
•It’s now consolidating those gains a bit. Watch to see if it goes on to form a proper base.
•With the current outlook being Market Uptrend Under Pressure, be very cautious about any new buys.


Stock Checkup
•CTrip.com has the best Composite Rating in the 43-member Leisure-Services industry group.
•It also has the group’s best SMR Rating, thanks to a strong return on equity and accelerating sales

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