Jan. 13, 2010 (Chinavestor) We have been calling one lucky shot after another in 2010- the latest being Baidu.com (NASDAQ:BIDU). We have been very vocal about Baidu.com - even issued a dedicated article for BIDU, Shanda Interactive (NASDAQ:SNDA) and Shanda Games (NASDAQ:GAME) on Tuesday before the big story broke out. We said all the way that BIDU is OVERSOLD - like this quote from last Friday's overbought-oversold report "Baidu.com (NASDAQ:BIDU) is a value play that is beat up for no reason. "Buy into weakness" says the cliche". So we added BIDU to the "Weekly Stock Buy List" last Friday effectively locking in $50 a share profits for subscribes.
Another set of excellent calls were the addition of China GrenTech (NASDAQ:GRRF), Acorn International (NYSE:ATV) and Linktone Ltd. (NASDAQ:LTON) to the Weekly Stock Buy List on December 31, 2009 - all these stocks gained high double digits the following week. The +66.95% overall 2009 performance of the Weekly Stock List in 2009 speaks for itself. Visit the "Premium Content" page for detailed description of Advanced Membership benefits.
As the following chart testifies, Baidu.com (NASDAQ:BIDU) WAS the most oversold China play till this morning. This suggested bottom fishing opportunity - a quality blue chip company like BIDU will not stay oversold too long, we have been arguing.
Zhongpin Inc. (NASDAQ:HOGS) is a China play that fell significantly but our radar screen suggests there is more downside left because HOGS is still trading within her trading envelope.
Most oversold China stock list
Looking at the most overbought end of the China stock universe, Giant Interactive (NYSE:GA) gets our attention. However the strength of this online game developer and operator is more of a catch up with the rest of the sector - read related coverage: China online game landscape after Shanda report
Most overbought Chinese stocks
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.