Back on May 7, soon after General Motors announced that it had lost $6 billion in the first quarter, I wrote the following in Cabot Wealth Advisory:

“There is, however, one auto stock that’s intriguing.  It’s Tata Motors (TTM) of India, with $9 billion in revenues over the past 12 months.  Tata acquired Jaguar last June, and we were impressed to read early this year that the top marques in the J.D. Power quality rankings were Jaguar and Buick.  And now Tata’s come out with the $2,500 Nano, a car designed for the masses of India that has the potential to succeed like the original “people’s car,” the Volkswagen Beetle.  Tata has already received 203,000 orders, including deposits of–brace yourself–77% of the selling price.  The first cars will be available in July.  And Tata pays a dividend of 4.5%

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Furthermore, TTM has an attractive chart.  After the market bottom of early March, the stock bounced from 3 to 8, and over the past four weeks it’s built a very nice and tightening base under 8, apparently building steam for a breakout into new-high territory and another advance.  I think the odds are pretty good.”

After that, the stock continued to trade tightly between 7 and 8.  This past weekend the Indian elections were concluded, and today all Indian ADR (American Depositary Receipts) soared.  Tata hit 9.74 and then pulled back a bit.  I still like it, long-term.

Another high-potential setup belongs to NetEase (NTES), a leading force in Chinese online gaming that we’ve been recommending for a while.

Back on March 16, editor Michael Cintolo of Cabot Top Ten Report wrote:

“Chinese online gaming is one of the big stories of the past few months, and … back for a third appearance, including one just last week, is NetEase.com, a Chinese Internet portal that gets more than 80% of its revenue from games. The big story is that China, while it has already passed the U.S. to become the world leader in the number of its citizens who are online, is still far behind in percentage terms (North America is over 73% online, while Asia is just 17%). So the potential for growth in China remains huge. The smaller story is that China’s economic slowdown has idled at least 20 million people, and some of them are passing the time in cheap Internet parlors immersed in online role-playing games. NetEase has one of the most popular games in Fantasy Westward Journey and continues to rake in the cash.

“NTES has just topped its high from the beginning of the year on big volume and looks ready to add another week to its string of three weeks with big volume advances. The stock has lost contact with its 25-day moving average, but thus far there aren’t any signs of a correction. You can jump on right here, at least in a small way, but waiting for a correction of at least a point makes more sense.”

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Not only did the trend continue, with the usual minor corrections, but a month later NetEase acquired the license to host World of Warcraft in China for the next three years.  The game is huge in the U.S. (it’s my 17-year-old son’s favorite) and it’s the fourth most popular game in China.

For the past month, NTES has been building a base at 30, and it seems to me that it’s only a matter of time until it breaks up through its old high and resumes its advance.