The9 Limited (ADR) trades on the NASDAQ under the ticker NCTY. These securities represent a non-US company trading on our exchanges. They are shares of foreign companies repackaged as American Depository Shares, enabling domestic investors to avoid cross-currency headaches, and allowing foreign companies like The9 Limited to have equity in the American markets. This Chinese company headquartered in Shanghai is an online game developer, including multiplayer online games which have become massively popular.

The stock has been in a downtrend since July of 2017, but is now retesting highs reached in the last trading year; as of the market close today, the stock opened at a high of 1.28 but was not able to hold its highs. There was a morning panic and a sharp sell off all in the first hour of trading. By 10:30am, the stock was trading below its previous day's close of $1.11 and remained in a downtrend all day never retesting $1.11

This stock is a high-beta stock that is two times more volatile than the overall market. This volatility translates to a greater rate of return and more profitability when the overall market is bullish. Currently, we are in a bull market and everything continues to rise, especially pennystocks.  However, the market is due for a correction in the future.

A company's EBITDA margin is the best metric to accurately predict profitability and return to shareholders.  NCTY has a negative EBITDA indicating operational difficulties and/or poor management. However, it is possible for pennystocks like NCTY to move even when there are no sound fundamentals and no publicized news catalysts.

Trading volume remains up today with 5 million shares; Average trading volume is 450,000 shares. There are 53 million shares outstanding.

While on analyst put a price target of $3.50 on the stock, my recommendation for NCTY is to not Trade it until there is a confirmed breakout. Stay in Cash for now.