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China stocks to watch in March

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eye March 1, 2010 (Chinavestor) A relatively large number of Chinese stocks are offering trading opportunities in the first day of March, according to the overbought and oversold monitors. The overbought list suggest stocks with strong momentum have a potential to shine on Monday. But investors have to be careful with too much of momentum - as is the case with China Eastern Airlines (NYSE:CEA) or Giant Interactive (NYSE:GA). China Digital TV Holding (NYSE:STV) has been approaching theoretical highs, another sign of a potential pullback. The best China stocks for Monday include China Telecom (NYSE:CHA), Synutra International (NASDAQ:SYUT), China Biotics Inc. (NASDAQ:CHBT), New Oriental Education & Technology (NYSE:EDU) and Ctrip.com (NASDAQ:CTRP). The oversold list suggest China TechFaith Wireless Comm. (NASDAQ:CNTF) became oversold a might be turnaround situation for the week. Yingli Green Energy Holding (NYSE:YGE) and VisionChina Media Inc. (NASDAQ:VISN) might be up to a nice surprise today as well - according to the oversold chart in the lower section of this page.


Going stock specific on the overbought chart, Giant Interactive (NYSE:GA) is on a tight spot on Monday for two reasons. For one, the stock is clearly overbought and is ripe for a pull back. For two, industry leader Shanda Games (NASDAQ:GAME) reported a decline in net income from last quarter, sending her shares sharply lower. The whole sector feels the pinch when industry leaders disappoint.

China Digital TV Holdings (NYSE:STV) is a classic example when a 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.

China Eastern Airlines (NYSE:CEA) is not just approaching theoretical highs but has risen sharply in the last five trading sessions in addition. The time has come to take a breather for CEA, according to the overbought monitor below.

But not all stocks on the chart looks bearish for the short term. Stocks that have shown sustained momentum but are trading close to their trading envelopes are are ready to shine! Ctrip.com (NASDAQ:CTRP) is a stock with strong fundamentals that is showing off from a technical point of view. China Telecom (NYSE:CHA) got a Deutsche Bank upgrade to buy from hold last Friday and is on fire. For the rest of the best looking China stocks for Monday, see chart below.

Most overbought China stocks list

OB-201031


The oversold end of the China stock universe is just as interesting when markets are strong. Oversold China TechFaith Wireless (NASDAQ:CNTF) is considered oversold and is readying for a bounce back. Oversold Yingly Green Energy (NYSE:YGE) and Visionchina Media (NASDAQ:VISN) are trading below their trading envelope and are 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.

American Dairy (NYSE:ADY) collapsed last Thursday - but more weakness is to come , according to the chart below. For the rest of the most interesting China stocks of the day scroll down to chart below.

Most oversold China stock list

OS-201031

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.

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