Looking at Chinese ADRs from a technical point of view, China Mobile (CHL) looks the best at the moment. Given its shear size CHL is a good defensive play with huge upside potential. NASDAQ listed Chinese ADRs had a break on Wednesday with NetEase (NTES) and Sohu.com (SOHU) trading sideways but Baidu.com (BIDU) and Shanda Interactive (SNDA) fell.
Based on the following Overbought/Oversold indicator, Sina Corp. (SINA ) fell heavily the ordeal may not be just over for the stock because it just breached the top of its trading range. But Sinopec (SNP) is expected to make a comeback soon because the stock is trading now at the low end of its trading range and has been on a retreat for over a month by now.
NetEase (NTES) is still close to the theoretical high and thus is subject to a negative correction.
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.