Sina Corp Erases All Of June's Gains

Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Sina Corp SINA shares were trading lower by $1.06 at $37.87 in Wednesday's session. The Chinese online media company is in the red despite reporting a Q2 beat for EPS ($0.06 vs. $0.04 estimates) and for revenue ($213.6 million vs. $199.78 million).

It has been a rough few months for the issue, as it catapulted from its May 29 close ($40.73) to a daily close of $60.74 by June 12. The catalyst for that ridiculous rally was the announcement that CEO Charles Chao was making a $465 million cash investment in the company. The day following the announcement, it rallied 23 percent from $40.73 to $50.21 on its journey to the $60 handle.

Since reaching that elevated level on no other fundamental news, the issue has been in a tailspin. Some of the blame may reside with the meltdown in the Chinese stock market, but most likely it was excessive momentum traders taking the issue to a level that it had no right being at in such a short time period.

After a higher open, Sina rallied and found resistance just above its August 24 high of $40.22, reaching $40.30 before reversing course. So far, the freefall has found support at $37.55 and rebounded back into the $38 handle. The current low coincides with its April 24 low at $37.54.