July 12, 2012 (Chinavestor) Zhongpin Inc. (NASDAQ:HOGS) keeps surprising investors to the upside. HOGS was not overbought, as we just wrote it earlier the week, suggesting more upside was possible. Then came a 7.50% surge on Wednesday. Looking at the overbought monitor today, the stock is overbought and may have to level off before any more significant move to the upside.
China Kanghui Holding (NYSE:KH) is another stock that's trading way above its trading envelope. And this concludes stock extremes on the overbought screen. For oversold stocks, please scroll down the page to next chart.
Unlike the overbought screen, the oversold screen is full of action. Tudou Holding (NASDAQ:TUDO) and Youku.com Inc. (NYSE:YOKU) continue to fall, making investors wonder where the bottom just might be. Unfortunately for Youku.com Inc. (NYSE:YOKU), the stock hasn't reached theoretical lows yet.
Internet darling Sina Corp. (NASDAQ:SINA), Sohu.com (NASDAQ:SOHU) and Baidu.com (NASDAQ:BIDU) are all among the 20 most oversold China stocks. While BIDU has been trading in a narrower range, Sina Corp. (NASDAQ:SINA) and Sohu.com (NASDAQ:SOHU) fell a lot faster and a much greater magnitude. Unfortunately for the sector, none of these stocks have reached the bottom yet, according to the oversold monitor.
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.