Feb. 9, 2010 (Chinavestor) There are two major forces behind Chinese stock today. For one, we're in the midst of the earnings season. Baidu.com (NASDAQ:BIDU), among others, is going to report earnings today after the close. China Fire & Security Group (NASDAQ:CFSG) jumped 20% on Monday after a higher 2010 revenue guidance. And for two, EU officials seems to be set to help Greece leaving uncertainties behind. Bargain hunters are back, looking at oversold China stocks - and so do we.
The oversold end of the China stock universe is a full house. Two set of stocks are poised to do well: large cap blue chips and stocks with sudden, unexpected drop. Petrochina Co. (NYSE:PTR) is among large cap blue chips that don't stay oversold for along time. HSBC Plc. (NYSE:HBC), a Hang Seng Index heavy weight off Hong Kong is another major player that is expected to do well. Stronger euro helps commodity prices and resource players- expect Aluminum Corp. of China (NYSE:ACH) and Yanzhou Coal (NYSE:YZC) to outperform on Tuesday.
Small cap Tongxin Int. (NASDAQ:TXIC) and China Automotive Systems (NASDAQ:CAAS) will get a lift from strong January car sales. According to the latest statistics, total passenger and commercial vehicles sales more than doubled in January compared to a year earlier.
Most oversold China stocks
The overbought end of the China stock universe is lackluster at the moment. China Fire & Security Co. (NASDAQ:CFSG) jumped 20% on Monday following a sweetened 2010 revenue forecast. The good news is that despite a sizable jump, the company is not overbought yet - leaving more room to the upside on Tuesday.
Baidu.com (NASDAQ:BIDU) has been gaining momentum lately but earnings will override short term trend. China's largest search engine company is going to report 2009 fourth quarter earnings after the market close on Tuesday, giving investors an idea not only into BIDU's finances but into the strength of the advertisement sector in China. Ramifications of BIDU earnings will effect Sohu.com (NASDAQ:SOHU), Sina Corp. (NASDAQ:SINA), NetEase.com (NASDAQ:NTES), among others.
Most overbought China stocks