American China Stocks - ADR - Overbought / Oversold Indicator							11/19/2008
Summary: The overall sell-off on Tuesday dented into most of Chinese ADR prices as well. Stocks that took most of the beating are Baidu.com (BIDU), China Unicom (CHU) and NetEase.com Inc. (NTES). Baidu.com is still suffering from the weekend news that the Company sold link to unlicensed medical suppliers thus undermining the credibility of BIDU's search. The Company took quite a beating trading $50 lower from Friday's closing price of $179. Based on our Overbought/Oversold graphics BIDU looks now oversold and is ripe for a turnaround. So daytraders, have fun! The story with China Unicom is also fundamental. The Company reported operational statistcs for October 2008 - now the combined CHU and CN numbers. Subscriber growth is just average, did not impress investors. Secondly, CHU's 3G network still needs license while China Mobile (CHL), China's largest mobile operator is ahead by tendering headsets for its home grown TD-SCDMA network. NetEase.com is on the slide as investors bet that the Company is losing some of its shine to other game developers such as Giant Interactive (GA) and Shanda interactive (SNDA). See chart here. China's online game market is highly competitive and represents the largest segment measured by online revenues.
Ticker
ALUMINUM CP CHINA (ACH)
AMERICAN ORIENTL (AOB)
BAIDU.COM (BIDU)
CNOOC LTD ADS (CEO)
CHINA TELECOM CP (CHA)
CHINA MOBILE LTD (CHL)
CHINA UNICOM (CHU)
HSBC HLDGS PLC AD (HBC)
HUANENG POWER INT (HNP)
CHINA LIFE INS CO (LFC)
NETEASE.COM ADS (NTES)
PETROCHINA CO ADS (PTR)
SINA CORPORATION (SINA)
CHINA PETRO & CHEM (SNP)
SOHU.COM INC (SOHU)
CHINA EASTERN AIR (CEA)
YAZHOU COAL MNG C (YZC)
Overbought A technical condition that occurs when prices are considered too high and susceptible to a decline. Overbought conditions can be classified by analyzing the chart pattern or with indicators such as the one above. A sharp advance from $15 to $30 in 2 weeks might lead a technician to believe that a security is overbought. Or, a security is sometimes considered overbought when the stock is trading out of its trading envelope and is approaching the theoretical high. It is important to keep in mind that overbought is not necessarily the same as being bearish. It merely infers that the stock has risen too far too fast and might be due for a pullback.
Oversold A technical condition that occurs when prices are considered too low and ripe for a rally. Oversold conditions can be classified by analyzing the chart pattern or with indicators such as the one above. A sharp decline from $30 to $15 in 2 weeks might lead a technician to believe that a security is oversold. Or, a security is sometimes considered oversold when the stock is trading below its trading envelope and is approaching theoretical lows. It is important to keep in mind that oversold is not necessarily the same as being bullish. It merely infers that the security has fallen too far too fast and may be due for a reaction rally.
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As market sentiment erodes so do China stocks. The best performer of the day is The9 Ltd. (NCTY), this NASDAQ listed Chinese online game operator. The Company reported better-than-expected 2008 Q3 figures with sales and profits above analysts' estimates. The Shanghai based operator of the "World of Warcraft" reported net income more than doubled on strong subscriber accounts. Profitability of The9 Ltd. is limited due to licensing fee the Company is entitled to pay for its vendors. The most profitable among Chinese game operators are Shanda Interactive (SNDA) and Giant Interactive (GA) thanks to their home grown game portfolio.

On the negative side, Baidu.com (BIDU) continued to deteriorate following reports that the Company sold links to unqualified health care providers. The issue is very sensitive in China and may potentially undermine the long-term credibility of the Company.

The loser of the day in percentage terms is Ctrip.com (CTRP), China's largest online travel agency. The Company reported worse-than-expected 2008 Q3 numbers. Revenue growth slowed while expenses soared, leaving the company with an EPS of RMB 3.13 vs. RMB 3.58 last quarter or RMB 3.32 a year ago. The stock is down $3.89 or 16.4% today.

China's oil triumvirate is down following softening crude oil price. Price of oil lost another $.24 as we speak on concerns of global economic slowdown. Falling oil hurts oil producer CNOOC Ltd. (CEO) the most because CEO has no refining activity. Petrochina (PTR), China's largest oil producer with significant refining capacity lost $1.84 while Sinopec (SNP), Asia's largest refiner is down $3.81 or 6.68% for the day. China's oil refiners get a boost from lower oil price as margins improve however oil consumption is falling as economic situation deteriorates, making Chinese oil companies less attractive.

 

Top 10 - Bottom 10 - China ADR			18-Nov-08	1:38pm
Name	Symbol	Price	Change	Change%
The9 Limited	NCTY	$13.50	$1.20	9.76%
Home Inns & Hotel	HMIN	$10.09	$0.64	6.77%
CHINA DIG TV HDG	STV	$5.82	$0.29	5.24%
City Telecom (H.K	CTEL	$2.58	$0.28	12.17%
AirMedia Group In	AMCN	$5.28	$0.27	5.39%
Focus Media Holdi	FMCN	$7.31	$0.21	2.96%
51job	JOBS	$6.69	$0.19	2.92%
Sohu.com Inc.	SOHU	$40.87	$0.17	0.42%
AMERICAN ORIENTL	AOB	$5.78	$0.16	2.85%
Linktone Ltd.	LTON	$0.85	$0.05	6.25%
SINOPEC SHANGHAI	SHI	$19.38	-$1.58	-7.54%
CHINA MOBILE LIMI	CHL	$41.72	-$1.74	-4.00%
PETROCHINA CO ADS	PTR	$71.02	-$1.84	-2.53%
TRINA SOLAR LTD A	TSL	$6.93	-$1.89	-21.43%
CHINA TELECOM CP	CHA	$34.18	-$2.08	-5.74%
CHINA LIFE INS CO	LFC	$37.70	-$2.84	-7.01%
CHINA PETRO & CHE	SNP	$53.19	-$3.81	-6.68%
Ctrip.com Interna	CTRP	$19.77	-$3.89	-16.44%
CNOOC LTD ADS	CEO	$71.69	-$4.05	-5.35%
Baidu.com	BIDU	$123.78	-$10.31	-7.69%

American China Stocks - ADR - Overbought / Oversold Indicator							11/18/2008
Summary: Chinese ADRs are on the retreat all across the board. The big loser of the day is Baidu.com (BIDU), China's premium search engine company. Looking at the chart below more loss is likely to follow in the short term. The company allegedly sold links to unlicensed medical companies, boosting their ranking and pretending if those companies were legit. Chinese state media TV aired the news over the weekend and created much havoc among internet users. NetEase (NTES) is losing steam and is trading below her trading envelope - creating opportunity for bottom fishing. On the upside, China Eastern Airlines (CEA) is shining on the back of government assistance of RMB 3 billion. Falling oil price helps just as much as over 50% of cost for airliners is related to kerosene. Stocks with potentially sustainable momentum are China Telecom, China Mobile and Huaneng Power.
Ticker
ALUMINUM CP CHINA (ACH)
AMERICAN ORIENTL (AOB)
BAIDU.COM (BIDU)
CNOOC LTD ADS (CEO)
CHINA TELECOM CP (CHA)
CHINA MOBILE LTD (CHL)
CHINA UNICOM (CHU)
HSBC HLDGS PLC AD (HBC)
HUANENG POWER INT (HNP)
CHINA LIFE INS CO (LFC)
NETEASE.COM ADS (NTES)
PETROCHINA CO ADS (PTR)
SINA CORPORATION (SINA)
CHINA PETRO & CHEM (SNP)
SOHU.COM INC (SOHU)
CHINA EASTERN AIR (CEA)
YAZHOU COAL MNG C (YZC)
Overbought A technical condition that occurs when prices are considered too high and susceptible to a decline. Overbought conditions can be classified by analyzing the chart pattern or with indicators such as the one above. A sharp advance from $15 to $30 in 2 weeks might lead a technician to believe that a security is overbought. Or, a security is sometimes considered overbought when the stock is trading out of its trading envelope and is approaching the theoretical high. It is important to keep in mind that overbought is not necessarily the same as being bearish. It merely infers that the stock has risen too far too fast and might be due for a pullback.
Oversold A technical condition that occurs when prices are considered too low and ripe for a rally. Oversold conditions can be classified by analyzing the chart pattern or with indicators such as the one above. A sharp decline from $30 to $15 in 2 weeks might lead a technician to believe that a security is oversold. Or, a security is sometimes considered oversold when the stock is trading below its trading envelope and is approaching theoretical lows. It is important to keep in mind that oversold is not necessarily the same as being bullish. It merely infers that the security has fallen too far too fast and may be due for a reaction rally.
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