According to the China ADR Overbought indicator, compiled by Chinavestor, China Life (601628.SS) (LFC) (2628.HK) is still the most overbought Chinese stock. The Company reported income premium of Yuan 172.2 billion for the first half of 2009, far below growth of rival Ping An Insurance. The stock fell in Hong Kong and Shanghai as well on Thursday following the announcement.
China Eastern Airlines (600115.SS)(0670.HK)(CEA) is overbought and is trading above its trading range. The stock jumped following news that it acquired Shanghai Airlines earlier the week, creating a quasi monopoly in the greater Shanghai area. The stock is set to pull back in coming days, looks markets have over reacted the news.
For the rest of the most overbought China stock list, please see chart below.
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.