Is there hope owning SORL Auto Parts Inc. (NASDAQ:SORL)?

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SORL Auto Parts, Inc. (NASDAQ:SORL) specializes in the development, production and distribution of air brake valves and hydraulic brake valves. This Zacks Rank #1 stock delivered an average positive earnings surprise of 94.5% in the trailing four quarters.

Shares of SORL Auto Parts, Inc. (NASDAQ:SORL) are currently poised at 17.00% from the open today and are trading at $8.74. More than 8,977,818 shares have exchanged hands compared to an average trading volume of 707.13K. At the current pps, the market cap stands at $163.53M. The stock prices of SORL Auto Parts, Inc. (NASDAQ:SORL) are currently trading at 12.05% below its 52 week high and 453.55% above its 52 week low.

SORL Auto Parts, Inc. (NASDAQ:SORL) is all set to announce its earnings on May 15/b. As per Zack’s analyst ratings, SORL Auto Parts, Inc. (NASDAQ:SORL) currently has an average brokerage rating of 1. On a scale of 1 to 5, a rating of 1 or 2 would indicate a buy, and a rating of 4 or 5 would signify a sell recommendation. A rating of 3 would indicate a hold on the stock. The consensus target price on (NASDAQ:SORL) is $8 with a high of $8 and a low of $8.

Let’s take a look at the technical analysis.

The Barchart Technical Opinion rating is a 100% Buy and ranks in the Top 1% of all short term signal directions. Longer term, the trend strength is in the Top 1%. Long term indicators fully support a continuation of the trend. The market is approaching overbought territory. Be watchful of a trend reversal.

The Exponential Moving Average (EMA) is similar to a simple moving average (average price over a set period) but it utilizes a weighting factor that exponentially declines from the most recent data point (recent prices are weighted higher than oil prices). EMA analysis compares the short term (5 days and 13 days), intermediate term (20 days) and long term (50 days) EMA’s. The respective EMA’s will give bullish signals when trading above trailing EMA’s and below the current price and vice versa. EMA alerts include crossovers (i.e the 5 day EMA crosses above/below the 20 day EMA) and EMA convergencies (5 day EMA equivalent to 13 day EMA). The long term and short term EMA’s of 7.02 and 4.39 are lower than the current trading price suggesting a bullish pattern in both short term as well as long term.

The relative strength index (RSI) is a momentum oscillator that is able to measure the velocity and magnitude of stock price changes. Momentum is calculated as the ratio of positive price changes to negative price changes. The RSI analysis compares the current RSI against neutral(50), oversold (30) and overbought (70) conditions. Alerts will inform you when stocks recede from oversold/overbought levels or breakthrough neutral (50). The current RSI is 86.17 suggesting a bullish price action.

As such, while we believe SORL Auto Parts, Inc. (NASDAQ:SORL) represents a compelling growth story exposed to several secularly attractive markets, it would be interesting to see how it fairs for long-term investors.

Sorl Auto Parts specializes in the development, production and distribution of air brake valves and hydraulic brake valves. It is headquartered in the Ruian District of Wenzhou City, China’s automotive manufacturing center. SORL sells its products to forty-two vehicle manufacturers, including all of the truck manufacturers in China. SORL’s customer base consists of original equipment manufacturers, aftermarket distributors, and international customers.

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