Looking at the most overbought China stock list, Sinovac (AMEX:SVA) and eLong Inc (NASDAQ:LONG) remain in danger zone while China Mobile (NYSE:CHL) is nearing a technical top and has become vulnerable to a correction. This I interpret as Sinovac and eLong will continue to weaken while resistance level for China Mobile is $60.
Most overbought China stock list
To find Chinese stocks that offer short term trading opportunities, let's take a look at the most oversold Chinese stock list. According to the following indicator, Shanda Interactive (NASDAQ:SNDA) is the most oversold China stock but has started coming off recent lows and its short term upside is thus limited. The same indicator suggests that despite heavy losses of China Digital TV Holdings (NYSE:STV), the stock is not oversold yet and has more downside potential.
Most oversold China stock list
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.