(Oct. 23, 2009 - Chinavestor) With index futures pointing to a higher open, momentum China stocks are expected to do well on Friday. Petrochina (NYSE:PTR), CNOOC Ltd. (NYSE:CEO), China Life Insurance (NYSE:LFC) and Yanzhou Coal (NYSE:YZC) outperformed in Hong Kong and Shanghai early morning. Additional stocks that look to have strong momentum ahead the bell include Sohu.com (NASDAQ:SOHU), Baidu.com (NASDAQ:BIDU). WuXi PharmaTech (NYSE:WX) is strong and has more upside left.
CAAS and WX are on the top of the chart, but as long as we have a strong market, expect these two do do well. Focus Media (FMCN) is another momentum stock with more upside for Friday. CEO and PTR are not overbought and with oil above $80/barrel, expect these two to do well on Friday.
Yanzhou Coal (NYSE:YZC) is China's third largest cola miner and was on fire in Shanghai and Hong Kong today. price of coal followed that of the oil very closely in China, so when oil is up so is coal. This in turn makes a strong case for Yanzhou Coal (YZC). Despite a strong showing in the last two days, there is more upside left for YZC.
Baidu.com (NASDAQ:BIDU) is another good stock to own on Friday. Despite a big jump on Thursday, there is a lot more left for China's search engine giant. Expect BIDU to have a strong rally on Friday.
Most overbought China stock list
The oversold monitor tells that New Oriental Education (NYSE:EDU) is oversold - though the stock is still trading within her trading envelope. Chinese solar stocks are still cheap, something bargain hunter should pay attention to.
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.