Sinopec, which trades under the ticker SNP on the NYSE and 600028 on the Shanghai Stock Exchange was up +2.33 pct yesterday, and +5.18 pct today in China. So when it opens today in NYSE, there will be a significant gap to the upside.

I noted that the stock was closed off on the final ticks yesterday in NY, probably to give somebody a nicer call option price to capture a better gain today. You see the price dropped from 1.45 to 1.10 on the Feb-06 55 calls as the price on the stock closed at 53.17. today the stock will open up probably 55 and the options will likely trade at 2.00, for close to a +100 pct gain in a day.

You see, there were 92 contracts purchased yesterday down to 1.10.

In April 2004, I recommended SNP, which is a solid oil company with a $46 billion market cap, as one of my three flat-out "Buys" in China, and subsequently the stock has been an undeniable success, just like the others.

SNP will have a little run to the upside here, but will then likely settle down in the next couple months (the RSI is a little rich for you -- or me -- to chase it right now).

Longer term SNP is an excellent holding, which pays a current dividend yield of +2.8 pct and has a PE of well under 10 on a ttm basis. The best tactic is to zero in on a company like this and get to know it, and how its stock trades. Then you write puts every time the stock reaches a low RSI on the daily and 60-minute chart.

As the years go by, you will have a very low cost base on the stock, and your cash-on-cash dividend return will be much better than bonds. Trust me, I know portfolio management.

I just can't figure out why I do this blog in the middle of the night.

The Shanghai composite index is flying. I took a screenshot of the last 30 of the 881 stock components in the index, following the trading there this morning. Are you not envious?

But check again because these are the penny stocks at the end of the list. The lowest numbers at the start of the SSE components list represent the higher cap stocks, and they didn't move as much. Still the SSE was up today +1.48 pct, which like the other exchange indexes in the Asia Pacific region was excellent.

We'll just have to wait to see if all this is a sustainable break-out or just a bull trap.

On a different note, this year will be a better one for China's sell-side, I believe, as broker-dealers in 2005 lost 19.2 billion yuan, reported by the Shanghai Fly. Interesting that he also reported to me a day ago that because sentiment in Shanghai had turned excessively bearish in the past week, he was expecting a rally, and he told me he was holding three stocks for the near-term: 600028 (SNP), 000983 and 600094, which are in oil, coal and textiles, respectively.

I haven't had time to check them out. There are only so many hours in a day, and I see I am up at 4:00 am ET doing this blog for some unfathomable reason.