China Ceramics Co Ltd (NASDAQ: CCCL) is flying early on in the trading session this morning. However, if you go digging for press releases or SEC filings, you’re not going to find any. Nonetheless, we believe that we’ve found the reason for the gains. Today, we’ll talk about:
- Why CCCL is headed for the top;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why CCCL Is Headed For The Top
As mentioned above, China Ceramics is having an incredibly strong start to the trading session this morning, but the company hasn’t released any news that would suggest such gains. So, what’s the deal? Well, it seems like a sympathy run, a fact that my Twitter friend, Open Outcrier pointed out early on:
— Open Outcrier (@OpenOutcrier) October 18, 2018
Essentially, CCCL is a company that is heavily related to YECO. The two companies operate in the same industry and in the same region. Therefore, it seems as though the YECO climb led to excitement among CCCL investors. With the stock trading relatively flat and having relatively high short interest, the early morning spike seems to have led to a short squeeze that is causing tremendous gains in the market this morning.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. While China Ceramics hasn’t released any news, it’s not uncommon for correlated stocks to run when one of the stocks releases news. With the correlation between the company and YECO, it comes as no surprise that investors are pushing the stock toward the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:18), CCCL is trading at $5.37 per share after a gain of $3.58 per share or 200.00% so far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CCCL. In particular, we’re interested in following this sympathy run to see where it ends. We’ll also be watching to see if the company moves into restructuring as did YECO, which is why it’s flying in the first place. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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