China Trade: Post Olympics


Some investors believed the Beijing Olympics would drive stocks to peaks that rival the Himalayas. Others have said Shanghai’s index might dive as low as 2,008 after the 2008 Games.

Turns out playing the 2008 Olympics has required the fortitude and endurance of a world class athlete. As we reach the homestretch what should be your gameplan?

Lately investors have been disheartened by China’s power shortages, logistical nightmares, and factory closures in a bid for blue skies.

But an Olympics honeymoon for stocks could be just around the corner, explains CNBC’s Melissa Lee.

An upward jump in the market is possible in part because the Chinese index is among the worst-performing in the world this year, down some 45 percent.

My favorite pick in the space is China Mobile , says Guy Adami on Fast Money.

In addition, the market might benefit from a likely policy vacuum in the next month. Beijing probably won't introduce more tightening or any drastic reforms before the torch goes out, especially since President Hu Jintao recently stressed the need for economic stabilization to make sure the Games are a success.

"The Chinese culture has determined that the most publicized event in China's own history needs to start in great joy and end in enormous satisfaction," said Dong Tao, Asia ex-Japan economist for Credit Suisse. "Chinese leadership wants to make sure the economy and stock market prosper."

I think all hell could break loose after the Beijing Olympics, adds Fast Money's Karen Finerman. They’re trying to hold it together but I’m not sure they can.

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Trader disclosure: On July 30, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (AAPL), (TSO); Najarian Owns (CSCO) Calls, (EMC) Calls, (XLY) Calls, (SU) Calls; Macke Owns (WMT), (MSFT), (COST), (ATVID), (DIS), (EMC); Adami Owns (C), (GS), (INTC), (NUE), (AGU), (MSFT), (BTU); Finerman Owns (GS); Finerman's Firm And Finerman Own (C) Leaps; Finerman's Firm Owns (FLS), (MO), (NOK), (PM), (RAI), (SUN), (TSO), (VLO), (RIG), (MCC); Finerman's Firm Is Short (SPG), (KIM), (XLF), (BBT), (IYR), (IWM), (MDY), (SPY), (IJR)