According to the Oversold indicator most oversold China stocks made a come back on Wednesday riding on strong market sentiment except for The9 Ltd. (NCTY ), Suntech Power Holdings Co. Ltd. (STP), Linktone Plc (LTON) and Sinovac (SVA). These stocks clearly lack momentum and as such are not recommended to touch at the moment.
Guangshen Railway Co. Ltd. (GSH)(0525.HK)(601333.SS) and AsiaInfo Holdings, Inc. (ASIA) are now trading within their trading range, limiting their upside potential. Cogo Group (COGO) is still below its trading range, a sign that the stocks has left more ground to make up.
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.