(Sept. 25, 2009 - Chinavestor) The DJIA fell two days in a row taking a toll on Chinese ADRs. While it was hard to find any oversold China stock yesterday, the indicator is a full house today. The good news is that the S&P index futures point to a slightly higher open. If American indices manage to stay in the positive territory, certain Chinese stocks offer trading opportunities on Friday.
Looking at the most overbought China stock universe, Focus Media Holdings (NASDAQ:FMCN) is the most overbought China ADR at the moment - but it's all relative. The stock itself is not overbought, at least not dangerously, implying a potentially positive day for Friday. Again, it all depends on overall market sentiment, but FMCN is not terribly overbought, leaving room for an extension of the latest rally.
KongZhong Corp. (NASDAQ:KONG) has been plateaued, not much is left for the upside.
China BAK Battery (NASDAQ:CBAK) fell 7.79% on Thursday yet it is still up 23% vs. last week thanks to the bug jump on Wednesday. The stock is a dark horse at his point, might move to either direction.
Rino International (NASDAQ:RINO) is up 30% in just one week but based on trading characteristics it looks as if upside has reached its limit for the stock. Rino International (RINO) is definitely not overbought but a 30% jump on no particular news always raises doubts about the sustainability of the rally.
Asiainfo Holdings (NASDAQ:ASIA) and Cogo Group (NASDAQ:COGO) have both coming off previous highs and looks that they are losing their shine. Don't expect much upside there.
Most overbought China stock list
Most of the action took place on the oversold China stock landscape. While it was hard to find any oversold China stock just a few days ago, today's list is full with action. China Telecom (NYSE:CHA) remains the most oversold China stock, presenting an opportunity for bottom fishers. China Telecom is a solid company and deserves better. Again, here is an opportunity that seasoned investors shouldn't miss out.
Another value stock that is oversold and thus offers turnaround opportunity is Huaneng Power (NYSE:HNP). This company is the largest Chinese independent power generator with solid operation, cash flow and management. The stock is trading below her trading range and is approaching the theoretical lows. Again, another opportunity for bottom fishing, Huaneng Power (HNP) is an excellent value play.
American Oriental (NYSE:AOB) is an extremely volatile stock, showing up on the most overbought and oversold lists on a regular basis. Right now the stock is out of her trading range, lost 10% in one week - might turn around any time. Not necessarily on Friday, but one of these days I can see AOB turning around fast.
Weakness in the Chinese solar sector is evident on the oversold screen with five solar plays on the list today. Accoring to the indicator, all solar plays are within their trading range, indicating more downside risk despite recent losses.
Most oversold China stock list