Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Two Ways to Play: Honda Struggles to Keep Up in China


Strengthen your portfolio in good times and bad.

Honda Struggles to Keep Up in China

Honda Motor Company (HMC) is planning to build a new plant in China to keep up with the booming demand.

According to the Wall Street Journal, Honda's main joint venture in the city of Wuhan in Hubei province is already nearing capacity, expecting to sell some 200,000 vehicles this year. It could exceed the 240,000 max capacity as soon as next year.

Executives are targeting the new venture to begin production near the end of 2011, which should be able to add 100,000 cars a year. Analysts expect China to overtake the US as the largest auto market this year. Vehicle sales have grown about 50% through November and are poised to add another 10% to 15% in 2010.

From the Bull Pen: This is just another example of demand fueled by the Red Dragon, and how the American leadership position is gradually slipping away. In looking at the daily chart of Honda, we see the stock nearing the 33 pivot point, which may set up as a buy. Those bullish can set a sell stop 2% below that level. Toyota (TM) may also have the same setup near 81.

From the Bear Cave: If you're bearish on China, then the financial-heavy China 25 ETF (FXI) may be one for consideration. A better entry awaits, possibly near 43 to 44. If and when, and remember to set a buy stop.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei 1.91%, India 0.55%, Hang Seng 0.69%, Shanghai -2.32%, and Taiwan 0.88%.

Across the pond, we see the FTSE 1.04%, CAC 0.68%, DAX 0.36%

As of 8:15 AM EST, S&P Futures are trading +4.25 to 1112.50. Nasdaq futures are +9.25 to 1834.25

A Look at Commodities

Over in commodities, crude oil is -0.38 to 73.34 while gold is -8.400 to 1087.80 this morning. Silver is -0.120 to 16.915 and copper -0.345 to 3.1220.

The dollar Index is +0.0300 to 78.4500.

On the Radar


08:30 GDP- Third Estimate 2.7% cons.
08:30 GDP Prices- Third Estimate 0.5% cons.
10:00 Existing Home Sales 6.30M cons.

Click here for the full trading radar.

Good luck today!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos