Chinese ADRs lost some of their shine last week as profit taking took a toll on stock prices world wide. According to the Overbought/Oversold indicator compiled by Chinavestor most key industry leaders lost mometnum but Baidu.com in the last three months. Overall picture suggest Chinese ADRs are neutral for the most part and will follow American market sentiment on Monday.
Stocks that actually made a comeback or eked out some gain last week are limited to American Oriental, Baidu.com Inc. (BIDU: Quote Profile Research), Huaneng Power International (0902.HK: Quote, Profile , Research) (600011.SS: Quote, Profile , Research) (HNP: Quote, Profile , Research), and SINA Corporation (SINA: Quote, Profile, Research). For Sina the comeback is attributed to heavy selling on June 10 following 2009 Q1 results, looks as if investors over reacted to weak results. However our analysis pointed out that the worst may jet to come for the company - Sina falls after Q1 but remains overvalued.
Sinopec, Asia's largest refiner, had a strong day on Friday, but is trading lower in ahead the bell. Oil fell below $70 on weak economic outlook and expect Chinese oil companies to show weakness on Monday.
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.