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China momentum stocks to watch on Tuesday

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buy-sell April 13, 2010 (Chinavestor) Eye catching stocks from the overbought indicator this morning include LDK Solar (NYSE:LDK), Chindex International, Inc. (NASDAQ:CHDX), AgFeed Industries (NASDAQ:FEED), China Mobile (NYSE:CHL), and Suntech Power (NYSE:STP).

Tee oversold monitor is less active, stocks with a significant loss of momentum include Huaneng Power (NYSE:HNP), Perfect World Co. (NASDAQ:PWRD), China Housing & Land Development (NASDAQ:CHLN) and Sutor Technology (NASDAQ:SUTR).

 

Details: solar stocks were mixed on Monday - Trina Solar (NYSE:TSL) and LDK Solar (NYSE:LDK) advanced over 3% but Suntech Power (NYSE:STP) and most smaller cap players fell. The good news is that none of the solar stocks are overbought at the moment, suggesting a rally is viable.

Chindex International, Inc. (NASDAQ:CHDX) rose +12.26% in the last five trading session and is stretching too thin, according to the overbought monitor. Investors have to exercise caution in the upcoming days.

Shares of AgFeed Industries (NASDAQ:FEED) advanced from the lower end of her normal trading range above the trading envelope thanks to a strong three days showing. While the share price hasn't reached theoretical highs yet, sudden advance should make investors cautious. There is nothing wrong with taking profits...

Shares of China Mobile (NYSE:CHL) shed -1.09% on Monday, a timely technical correction following a substantial rally last week. China Mobile (NYSE:CHL) was the most overbought China stock on Monday and now looks ready to resume a rally.

Most overbought China stocks list

OB_2010413

There is not a single pure oversold China play at the moment, but the indicator picked up some interesting stock prices movements from yesterday. Huaneng Power (NYSE:HNP), the largest Chinese independent power producer, is trading at the low end of her trading envelope after a -2.03% fall on Monday.

Perfect World Co. (NASDAQ:PWRD) looks very similar to HNP from a technical point of view. While the fall is substantial,  none of these stocks are oversold yet.

Shares of China Housing & Land Development (NASDAQ:CHLN) have fallen three days in a row - yet there is more downside left, according to the chart below.

Sutor Technology (NASDAQ:SUTR) had a rough four trading days but is looking neutral from a technical point of view.

Most oversold China stocks

OS_2010413

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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