Two Stocks Breaking Out: Momo Inc & Huya Inc

Momo Inc (MOMO) and Huya Inc (HUYA) are two Chinese companies breaking out of a steep downtrend. MOMO just burst through a down-sloping trend line that goes back to its recent highs over $20.00 and HUYA just broke above its daily 20 moving average.

Both stocks are profitable. HUYA has a forward P/E of 16 while MOMO has a forward P/E of 7. Both will benefit from US monetary policy tightening, pushing money into foreign growth markets like China. Both charts have significant upside potential, considering they are trading near or at 52-week lows. Based on technical analysis that suggests a major Shanghai Composite breakout over the next 6 months, Chinese stocks are the place to slowly rotate, away from US equities. 

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(Click on image to enlarge)

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