Feb. 10, 2010 (Chinavestor) Rescue plans for Greece spurred investor optimism globally, suggesting oversold China stocks will come handy on Wednesday. Oversold conditions can be classified by analyzing the chart pattern or with indicators such as the one below. 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. Combine this with a positive overall market sentiment and you got a list of stocks that are expected to outperform the day.
Baidu.com (NASDAQ:BIDU) is up 10% in pre-market trading but is due to a correction, according to the following article: Baidu soars after market, but ceiling is near. China Fire & Security Group (NASDAQ:CFSG) has shown sustainable momentum in the past and is set to do well on Wednesday, according to the overbought chart below.
eLong Inc. (NASDAQ:LONG), China Green Agriculture (NYSE:CGA) and Origin Agritech (NASDAQ:SEED) are on the top of the oversold list. But it doesn't mean these stocks are the best buy for Wednesday. When disappointing earnings are behind a weak market showing, as is the case with China Green Agriculture (NYSE:CGA), Nam Tai Electronics (NYSE:NTE), Chindex International (NASDAQ:CHDX) and Origin Agritech (NASDAQ:SEED), technicals are overturned by strong fundamental reasons. Don't expect these stocks to participate in today's rally.