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Export data helps China stocks on Friday

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advance8 Dec. 11, 2009 (Chinavestor) Chinese exports rebounded in November, customs data show, as global demand improved. The Hang Seng Index broke a 5 day losing streak and European indices improved ahead of the U.S. market open. This suggests a strong market day for China ADRs and if so, investors expect momentum China stocks to do well on Friday. Stocks of interest for Friday include Hutchinson Telecom (NYSE:HTX), Focus Media Holdings (NASDAQ:FMCN), WuXiPharmaTech (NYSE:WX), New Oriental Education & Tech. Group Inc (NYSE:EDU), Cogo Group (NASDAQ:COGO), and Suntech Power (NYSE:STP) from the overbought monitor. Large cap NYSE listed stocks offer opportunity for the value investor; watch out for China Mobile (NYSE:CHL) and Sinopec Shanghai Petrochemical (NYSE:SHI) from the oversold end of the market. These stocks offer bottom fishing opportunity!

Hutchinson Telecom (NYSE:HTX) is the most overbought CHina ADR at the moment, but that strenght is all relative because HTX is a low volume, low risk stock that a 3.3% move a day can trigger a dramatic improvement on the overbought monitor. Nevertheless smart investors can make money off HTX on Friday assuming the stock price is going to improve.

Focus Media Holdings (NASDAQ:FMCN) advanced 7.75% on Thursday after a strong Wednesday. Strong volume on both days suggests the rally is not over yet. Focus Media is approaching the theoretical high but there is room left to go, according to the following overbought monitor.

WuXi PharmaTech (NYSE:WX) advanced 2.87% to $17.23 on Thursday and is fighting the $18 resistance level for the second time within a month. WX is looking good on the overbought monitor this morning suggesting $18 is doable.

New Oriental Education & Tech. Group Inc (NYSE:EDU) is similar to Cogo Group Inc. (NASDAQ:COGO) on the overbought chart below suggesting more upside is ahead on Friday. Both stocks have momentum but are far from their theoretical highs, a bullish sign.

Suntech Power (NYSE:STP) has been on the "Weekly Stock Buy List" couple of times as well as on the "Conservative" Portfolio for November and December, and for a good reason. The stock is not only strong fundamentally but the overbought monitor testifies that the rally for STP is far from over. Don't be fooled by profit taking on Thursday, Friday is going to be another strong day for this first class Chinese solar company.

Most overbought China stock list

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Looking at the most oversold China ADR universe, it is apparent that large cap, NYSE listed China stocks have experience a sudden drop in the last five trading days and a rebound is on the corner. Huaneng Power (NYSE:HNP) is not only approaching the theoretical low but dropped 7.3% this week. Such a sudden drop for China's largest independent power producer is highly unusual as the oversold  chart testifies and thus suggests HNP is going to turn around SOON. Bottom fishing time is here, investor!

Another oversold China play is Sinopec Shanghai Petrochemical (NYSE:SHI). SHI dropped only a third that of HNP but that is highly unusual move for China's largest ethylene and propylene maker.

The Chinese telecom sector has been underperforming in all 2009 so far. As the oversold monitor testifies China Telecom (NYSE:CHA) and China Mobile (NYSE:CHL) have been clearly on the losing streak in the last two weeks. But intelligent investors know that sector rotation will eventually come and telecoms with a strong balance sheet and growth will outperform the rest of the market in 2010. China Mobile (NYSE:CHL) is the best Chinese telecom company and at $46 is certainly a steal.

Aluminum Corp. of China (NYSE:ACH) has been volatile in the past week as commodity prices fell on the strong dollar. But that trend might change and ACH is in a position to recover a 5% loss in an instant. 

Most oversold China stock list

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