(Sept. 1, 2009 - Chinavestor) Shares of Chinese companies have clearly lost their shine by the end of August. As the following overbought China stock list testifies, there is not a single China ADR that is overbought at this moment. Except for AMEX listed Sinocav (AMEX:SVA), a small cap Chinese vaccine maker, whose shares jumped over 50% on Monday. "Sinovac jumps over the moon".
China Telecom (NYSE:CHA) is the best looking China ADR with somewhat strong momentum.
Most overbought China stock list
Not surprisingly, the most oversold China ADR list is much more active. Guangshen Rail (NYSE:GSH), a large railway operator in the Pearl river delta region, became the most oversold China ADR on Monday. The company reported not strong enough 2009 first six month results, but it looks as if investors over reacted and GSH has some upside potential. But this is not a much liquid stock, so don't expect a huge pop all in a sudden. This is more of a value stock waiting to be recovered, again.
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.