(Oct. 7, 2009 - Chinavestor) All it took was three strong days and the overbought indicator is screaming again while the oversold China stock list is without any action. Here is a list of stocks of interest for today:
Focus Media Holdings (NASDAQ:FMCN) is the most overbought China stock at the moment. While I was bullish on this stock on Tuesday, saying "Focus Media Holding (NASDAQ:FMCN) had a very strong rally on Monday and remains on fire. Given the longer term momentum Focus media has accumulated, there is upside left for FMCN, at least for the short run", I'm ready to call it quits and suggest taking profits off the table today.
Hurray! Holdings (NASDAQ:HRAY) became a red flag for me as well.
Baidu.com (NASDAQ:BIDU) flew by the $400 level at ease and the stock is still not overbought from a technical point of view. For a detailed analysis of the $19.11 jump on Tuesday, read this related article: Baidu fast tracks $400. What's next?
Another stock I want to talk about is E-House Holdings (NYSE:EJ), a stock that mde it to the "BEST" stock list on the Weekly Stock Recommendation - available for subscribers only. Here is what went out yesterday at 11:00 A.M. to Chinavestor clients:
"We placed E-House Holdings (NYSE:EJ) on the BEST stock list last week. If you bought this stock for $21 at the open on Monday, you made a 10% gain by now. E-House is trading at $23.31 at this moment. While there may be further upside for the stock, a 10% profit in less than two days is too good to miss. Take some profits off the table."
This turned to be a good call. However while there is upside potential left for E-House Holdings Ltd. (NYSE:EJ), any upside is contingent upon market momentum, something that might turn around fast. If that happens, E-House (NYSE:EJ) will drop fast given her extraordinary run this week.
If you want to know what other stocks I have on the Weekly Stock Recommendation and want to receive e-mail alerts when to buy and sell them, subscribe to Advanced membership now. See subscriber benefits on the "Premium Content" page.
Most overbought China stock list
Like I said, the oversold China stock list became very pale, most of action is on the overbought list today. however there are some stocks of interest. American Oriental Bioeng. (NYSE:AOB), a highly volatile stock, is on the list and thus raises interest. This stock might pop up any time, based on trading characteristics. So don't write American Oriental (NYSE:AOB) off just yet, rather wait and see. The stocks is fighting the $4.75 level right now but might go to $5.00 any time, bringing smiles to American Oriental Bioengineering (NYSE:AOB) investors.
Shanda Interactive (NASDAQ:SNDA) and Changyou.com (NASDAQ:CYOU) are also on the list, a sort of surprise following Shanda's maiden IPO this year.
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.