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Volatile China stocks to watch on Monday

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economy3Dec. 14, 2009 (Chinavestor) We have some good news for the China stocks investor community. We added approx. 50 smaller cap NASDAQ and AMEX listed China ADRs to the overbought / oversold monitor to track. This way we cater for the momentum stock followers in addition to the more conservative investor. Stock of interest for today include Qiao Xing Universal Telephone (NASDAQ:XING), General Steel Hold. (NYSE:GSI), Focus Media Holdings (NASAQ:FMCN), Suntech Power (NSE:STP), AsiaInfo Holdings (NASAQ:ASIA), Yucheng Technologies (NASDAQ:YTEC) and Asiainfo Holdings (NASDAQ:ASIA) from the overbought list. ADRs of interest for today from the other end of the stock universe, e.g. most oversold China stocks, include CNinsure (NASDAQ:CISG), China's largest independent power producer Huaneng Power (NYSE:HNP), China Mobile (NYSE:CHL), China telecom (NYSE:CHA) and Tiens Biotech (AMEX:TBV).

Momentum China stocks are expected to do well on strong market days and as such, Monday is a potential winner for most overbought stocks. As the following chart testifies, Qiao Xing Universal Telephone (NASDAQ:XING) is the most overbought China stock today but again, a strong market day is expected to keep XING go higher.  Qiao Xing Universal Telephone (NASDAQ:XING)  has been trading within the narrow $1.80 - $2.20 trading range for the last four months and the sudden and unusual advance in the last two days bumped up the stock on the overbought list.

General Steel Holdings (NYSE:GSI) advanced 17% plus over the last three trading days with heavy underlying volume. This suggests the rally is not over just yet for this hot stock.

We have been following Focus Media Holdings (NASDAQ:FMCN) for the longest time and its current strength comes as a no surprise to us. After the failed attempt to sell her core business to Sina Corp. the market has to reassess the true value of the company. Given that her shares were trading up in the high $40 range before, current $20 range looks conservative to many investors.

Suntech Power (NYSE:STP) is another stock with huge upside potential. Not only did solar stocks exceed Q3 revenue and earnings expectations but their stock prices are still in shambles - except for Trina Solar (NYSE:TSL). Suntech is not overbought yet but has accumulated sustainable momentum as the following overbought chart testifies. Suntech has been on Chinavestor's Growth Portfolio and on the Weekly Stock Buy List from time to time keeping our Premium members ahead of the game. We have just posted the latest updates of the Weekly Stock List, a list of momentum stocks to watch this week. If you want to know what stocks we like and are likely to outperform, sign up for Advanced membership now.

Another stock we caught on time is AsiaInfo Holdings (NASDAQ:ASIA). We told our premium members to buy ASIA on December 1st and it proved to be one of the best calls we made this month. ASIA advanced 23.7% for the week and given the nature of the big jump a week ago, the rally may not be fully over just yet.

Yucheng Technologies Ltd. (NASDAQ:YTEC) is another stock of interest for today. While it is easy to find stocks with momentum but it's a whole different ballgame when it comes to sustainability. This is why YTEC looks good to us as this point - a stock with strong momentum but in a position where it is mot overbought just yet.

For the rest of the momentum stock universe, see chart below.

Most overbought China stock list

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Looking at the other end of the spectrum we notice the following large cap NYSE stocks that offer bottom fishing at current prices. Take a look at the largest independent Chinese power generator, Huaneng Power (NYSE:HNP), for example. The stock has not only lost 7.6% in December alone, a highly unusual price drop for such a large cap company, but is trading right at the theoretical lows. This suggests a technical correction is imminent and expect HNP to do well for the rest of the week as well.

The extent of the weakness of China Mobile (NYSE:CHL) and China Telecom (NYSE:CHA) is beyond rationale as well. China Mobile (NYSE:CHL) is the largest mobile carrier in the world, has ample cash flow, and has just started to roll out 3G phones for the mass Chinese market. If there was an opportunity for the value buyer, CHL is certainly a perfect candidate.

While CNinsure Inc. (NASDAQ:CISG) is the most oversold China stock at the moment, it is important to notice that the stock is just trading below her trading envelope. This suggests that the slide for CISG is not over just yet.

Tiens Biotech Group (AMEX:TBS) is a low volume AMEX stock that lost 20% after the big bump up on November 17. It looks as if only hot money was moving the stock had has left retail investors in the cold for the rest of the month. There is no current catalyst to move the stock and as such is a stock with little upside for the upcoming weeks.

Most oversold China stock list

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