Market 2017-11-27 (QD, MU, and more)

Market finishes mixed. Retailers enjoy the holiday sprit, especially online spending jumps 17% Y/Y.

Energy and Basic Materials drag the whole market amid China effect (tightening borrowing to deleverage debts, Shanghai index has big drop in last few days). USO -1.7%.

This week will be critical for tax reform, which faces more and more critism.

Winners

Retailers are broadly doing well today, from Amazon to department stores, from outfits to electronics. Encouraging data will come out in the following days.

Qudian (QD +10.6%) finally has a bounce after 9-day drop, cutting the stock price to less than half. I have done some homework on this company. The company started in 2014. Most of customers were students, who had difficulties to purchase big ticket merchandise (for instance, iPhone). They started to make profit in 2016. Now they are trying to service millions customers who don't have credit card.  Their only ER after IPO was reported on 11/13: Q3 EPS of RMB 2.24, revenue of RMB 1.45B (+307.7% Y/Y). Sales commission represented 20.3% of total revenue in third quarter 2017, increased from 5.2% in third quarter of 2016. The growth rate is incredible. The recent headwind includes government regulation and possible data bleach. The positive news includes $100M buyback plan and at least 6 "BUY" ratings.

ILMN (+4.2%) it seems there is no significant news.

Losers

Some hottest stocks take a hit today, SQ -16% (One Wall Street analyst downgrades Square, citing an "overdone" rally); XNET -15.7%; OSTK -9.3%.

Semiconductor stocks fell after Morgan Stanley issued downgrades on several chipmakers, including Western Digital (WDC -6.7%), on concerns that prices for memory chips will fall. MU -3.3%, NVDA -1.3%, MRLX -2.7%, AMAT -1.7%.

My Trades Today

Last Friday, QD dived more than 20% as Alibaba asked QD to lower the interest rate to 24% by 11/30. I believe regulation will benefit QD in a long run. Therefore I triple-down on Friday to lower my average cost to below $14. Today I sold 1/3 of my position @ $14.5 to reduce weight. Be cautious with QD due to the high volatility.

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