Chinese Green Agriculture Stocks

China is still in the early stages of growth despite impressive gains past 20 years.  While US government is busy bailing out banks and car companies, China government is spending over $500 billion on
actual infrastructure projects like roads, bridges, and other constructions that will eventually give them an even greater advantages.  It is clear that China will continue to expand and thus drive up their growth numbers.  There are three specific sectors in China that have a much bigger upside.  These sectors are agriculture, energy, and medicine.

One of China’s goal is to self-sustain.  In order to accomplish this goal, they must start producing food and lots of it.  In order to produce enough food for its population, Chinese farmers are using greater amounts of fertilizer.  Unfortunately, it is resulting in massive pollution in China.  The solution to this problem is to go “green” agriculture strategies.  Today, I would like to take a look at 2 stocks in this area.

First stock is China Green Agriculture (CGA).  CGA has been performing really well past year.  It has made some retracement after reaching all time high at $18 level.  In looking at a six month chart, a good time to be buying would be slightly below $14.  But, keep in mind that there is a resistance at $16 if you are thinking short-term investment.  I believe CGA will do exceptionally well in 3-5 year outlook.

China Agritech (CAGC) is another “green” agriculture stock.  As you can see from six month chart, CAGC has performed extremely well.  There seems to be a support at $20 soentering any Long positions around its support level would be strategic. 

In the next article, I will be taking a look at a cheap Chinese energy company.

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