Dec. 22, 2009 (Chinavestor) Looking at the best performing china stocks on Monday measured by % change, Chinese solar companies tower the list. JA Solar (NASDAQ:JASO), China Sunergy (NASDAQ:CSUN), Solarfun Power (NASDAQ:SOLF), ReneSola (NYSE:SOL), Canadian Solar (NASDAQ:CSIQ) all had an excellent market day but are far from overbought (OB) according to the chart below. We prefer OBOS monitor because its effective use can help investors stay ahead of the market. While this might sound as an old cliche, the fact of the matter is that we have made several excellent calls using the OBOS monitor. We told you yesterday that Simcere Pharma (NYSE:SCR) "getting overbought and is ready to take a breather on Monday, according to the overbought indicator below". SCR fell -5.28% on Monday...Another stock we highlighted for a long time as the most overbought China play was China Automotive Systems (NASDAQ:CAAS). Now that CAAS fell -12.7% just in the last five days I hope you quit the stock on time. China Sky One Med (NASDAQ:CSKI) is now overbought but might be able to pull out a few good days - depending on market sentiment. But investors have to be careful now! Mindray Medical (NYSE:MR) is a stock to play close attention to. While it may take a breather for now, the stock is good from a fundamental point of view! Pharma sector strength helped American Oriental (NYSE:AOB) to move on the overbought list below and trends suggest there more upside left for AOB.
Most overbought China stock list
Looking at the other end of the spectrum, e.g. most oversold China ADR list, we have some excellent value plays ripe for bottom fishing. Petrochina (NYSE:PTR) and Aluminum Corp. of China (NYSE:ACH) are excellent value stocks trading at a discount according to the oversold monitor. The sudden drop in the value of China Life Insurance (NYSE:LFC) makes possible entry points for the medium term investor. Perfect World (NASDAQ:PWRD) and Baidu.com (NASDAQ:BIDU) are the best value stocks at the moment from the NASDAQ listed China stock universe.
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.