China Automotive Systems (NASDAQ:CAAS) advanced 26% in the last five trading days and is set to do well on Friday thanks to the strong jobs report. But be careful, CAAS might tumble similar to Rino International (NASDAQ:RINO). Rino have fallen 12.9% since Monday after hitting an all time high that day. As the following chart suggests, China Automotive Systems (NASDAQ:CAAS) is overbought, a technical condition that occurs when prices are considered too high and susceptible to a decline. 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.
JA Solar (NASDAQ:JASO) is screaming off the overbought chart after a 10% advance since last Friday. JASO made it to the "Weekly Stock List" last Friday, a list of stocks Advanced Members receive 30 minutes before the close each Friday. A SELL NOW email alert went out to clients yesterday after the stock hit a 10% gain for the week, a call might be considered premature based on strong market day on Friday. But the same methodology helped Advanced members to lock in gains with AsiaInfo Holdings (NASDAQ:ASIA), another stock from the Weekly Stock List. We sent out a SELL ASIA NOW email alert on Wednesday, helping Advanced members to avoid the 9.12% fall on Thursday. If you want to know what stocks we're going to pick for the upcoming week, sign up for Advanced membership now. Remember, stock list comes with email alert when to sell, helping you stay ahead of the market. For detailed description of subscriber benefits visit the Premium Content page.
Shanda Interactive (NASDAQ:SNDA) has significantly moved up in the overbought list after reporting robust 2009 Q3 numbers, yet the stock is far from overbought. This is turn suggests Shanda has more upside left.
Most overbought China stock list
E-House Holdings (NYSE:EJ) has advanced 21.8% since last Friday, a strong statement about the outlook of the Chinese real estate market. fears that an asset bubble is building in China subdued as investors shifted focus to record manufacturing growth in China and to better-then-expected jobs report in the U.S.
VisionChina Media (NASDAQ:VISN) advanced 21.4% for the week, most of on Thursday with heavy volume. It is important to notice that both rallies of Tuesday and Thursday were accompanied by strong underlying volume, a very bullish statement indicating strong money flows behind the move. This implies that the rally for VisionChina Media (NASDAQ:VISN) is probably sustainable.
Wonder Auto Technology (NASDAQ:WATG) has been strong in December following a disappointing November. Low volume in the last few days suggests latest rally in December is just technical in nature, a bounce back off November lows. Don't expect much upside for WATG for the near term.
BMP Sunstone Group (NASDAQ:BJGP) looks very attractive from a technical point of view. The stock is up 19.9% for the week with increasing volume.