Sino-Forest Corp (PINK: SNOFF) – Wow, I hope you bought into that bounce on June 21 like I did – I hope you held those shares with an iron grip unlike I did! From a low of $1.38 on June 21 to the close yesterday at $3.06 got you almost 122%! However, if you held or are thinking about getting in there, this stock is still a far cry away from its April high of $25.83! That is off more than 88% from its April high …

Research firm Muddy Water mainly focuses its investigations on Chinese companies to find any kind of fraudulent activities and advises institutional investors. Muddy Waters’ accusations of SNOFF were not flattering, to say the least, alleging that the company overstated its timber holdings, among other allegations. SNOFF released a rebuttal saying that Muddy Waters’ research was inaccurate, spurious and defamatory.

Make sure you sign up for my free email alerts! You could have made a possible 23.8% on my SHMX alert Tuesday morning and 26.5% on JCOF on Monday!

The chart shows:

• SNOFF exploded today closing up over 55% while also breaking through resistance at $2.85!
• The RSI is pointed up coming out of oversold territory at about 26 with a nice possibility of continuing into the buy zone.
• The MACD had a golden cross showing that there is a likely reversal trend currently underway.
• The ADX positive and negative lines are reverting, which means that the tide is turning positively speaking.

The Bottom Line

John Paulson of Paulson & Co, a large hedge fund firm, recently dumped 34.7 million shares in SNOFF on June 17 based on Muddy Waters’ research, resulting in a loss of $720 million to the fund’s investors. This action is what caused the mass panic sell- off over the last couple days. Now it seems investors are back in for a incredible run and possible reversal opportunity. The crux of your decision on whether or not to invest should be based on who you trust… Muddy Waters or SNOFF. Then again, you could just play the action!

Don’t forget to sign up for my free email alerts! You could have made a possible 23.8% on my SHMX alert yesterday morning and 26.5% on JCOF on Monday!

Good Luck,

Ian Decker

Disclosure: No Positions

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