(Oct. 22, 2009 - Chinavestor) China Automotive Systems (NADAQ:CAAS) continues to top the most overbought China stock list, but as we indicated yesterday CAAS became vulnerable. Stocks to watch out for today include Focus Media (NASDQ:FMCN), Huaneng Power (NYSE:HNP) and China GreenTech Corp. (NASDAQ:GRRF) from the overbought list and China Eastern Arilines (NYSE:CEA) and NetEase.com Inc (NASDAQ:NTES) from the oversold list.
Focus Media Holdings (NASDAQ:FMCN) advanced another 4.4% on Wednesday, but as the following overbought chart shows, FMCN is NOT overbought yet. All this comes despite a staggering 60% advance in just one month! Focus Media (FMCN) got a lifeline after a failed bid from Sina to take over FMCN's core advertising assets. This left markets with the task to reassess the true value of Focus Media Holdings (NASDAQ:FMCN). Based on technicals, FMCN has more upside potential left.
Strong Q3 numbers and guidance propelled Huaneng Power (NYSE:HNP) up 6.26% on Wednesday. HNP is the largest Chinese independent power producer and a 6 percent jump is highly unusual from such large cap stocks. The strength of Huaneng's share price comes amid dismal earnings from her rival, Datang Power. While Datang fell in Asia on Thursday, Huaneng Power (NYSE:HNP) managed to stay in the black in Hong Kong today. Based on the overbought monitor, Huaneng (HNP) has more upside left, if American market sentiment cooperates.
China GreenTech Corp. (NASDAQ:GRRF) fell 4% yesterday after the big pop a day earlier. Based on the overbought indicator, GRRF is NOT overbought and has more upside left. The question is if the forces that popped China GreenTech Corp. (NASDAQ:GRRF) on Tuesday are still present. If history is any guide in future performance, I don't expect much of an action from GRRF today or the upcoming days. This just resembles to the hot money chasing small cap China stocks scenario.
Most overbought China stock list
The oversold indicator provides quite a bit of insight for today's trading. New Oriental Education Corp. (NYSE:EDU) bounced back but this is just a technical rebound and is not supported by fundamentals. EDU is trading at the lower end of her trading envelope, suggesting more downside is possible.
China Eastern Airlines (NYSE:CEA) is another China stock that lost its shine lately, but pay attention to the chart. CEA is now trading below her normal trading range, a difference from EDU. Additionally, China Eastern Airlines (NYSE:CEA) just got a significant analyst upgrade from Merrill Lynch, citing valuation. The Chinese airlines sector may get a boost from the strength of the aviation industry. United Airlines just announced strong earnings with upped outlook. China Eastern Airlines (CEA) present bottom fishing opportunity for the intelligent investor.
NetEase.com Inc. (NASDAQ:NTES) is about to hit short term bottom, according to the oversold indicator. The most profitable Chinese online game developer and operator has been trading below her trading envelope since last week and remained on the slide. But as the share price of NetEase.com (NASDAQ:NTES) approaches the theoretical low point, NTES is getting oversold. This in turn suggests a positive market day is highly likely for NTES, unless market sentiment interferes.
Most oversold China stocks