China Nepstar Chain Drugstore Ltd. (NPD)

Good morning!

It seems lately that China Nepstar Chain Drugstore Ltd. (NPD) had an anchor around its neck.  The stock has been on a persistent decline for well over a month fueled by some disappointing financial news.  It is a NYSE stock that seems intent on becoming a penny stock

NPD has been its own worst enemy posting disappointing results for the first Q on expansion costs, increased expenses and a management shakeup, etc…

BUT, this is a company that has $1.58 in cash,  great debt and liquidity ratios and has the clout of having over 2,500 stores in its Mainland China drugstore empire .

Eventually buyers get exhausted….and, that may be what has happened with NPD.

Here is the chart for NPD!

The question you have to ask yourself “Is this rally real?”.  It might be….or it might fall back.  If the stock falls back to $3.00 again and THEN climbs, popular consensus is that is when to really jump in.  That is confirmation of the trend being broken and a great buying signal.

I would watch NPD.  The stock is down now, but it won’t be forever.  I expect bigger and better things from NPD….maybe soon.

Good luck and GREAT trading,

Jeffrey Dean, Senior Editor

 
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