April 15, 2010 (Chinavestor) The number of Chinese stocks trading at extremes has been on the rise. China Mobile (NYSE:CHL) remains overbought yet may continue to show strength before taking a breather. Share price of Xinhua Sports & Ent. (NASDAQ:XSEL) hasn't reached theoretical highs yet suggesting more upside is possible. LDK Solar (NYSE:LDK) isn't fully overbought yet, the stock may piggyback on strong energy prices. The overbought indicator caught the unusual advance of Xinyuan Real Estate (NYSE:XIN). The stock isn't overbought suggesting more price gains may lay ahead. Shares of Changyou.com (NASDAQ:CYOU) advanced +5.7% on Wednesday - in sharp contrast to Perfect World (NASDAQ:PWRD), another second tier online game developer and operator.
Besides PWRD, the oversold monitor captured the unusual loss in the share price of China Natural Resources Inc. (NASDAQ:CHNR) and Simcere Pharmaceutical (NYSE:SCR). Despite significant losses, none of these stocks are oversold - suggesting more downside is likely to follow.
Details: China Mobile (NYSE:CHL) is a large cap China stocks that don't get and stay overbought too often. But considering that China Moible (HKG:0941) H-shares advanced +0.7% in Hong Kong earlier today, NYSE listing may extend the rally.
Changyou.com (NASDAQ:CYOU) has been gaining momentum while Perfect World (NASDAQ:PWRD), another Chinese online game stocks, has been losing ground. There is a rotation taking place within the sector - but these trends don't last forever. Expect Perfect World (NASDAQ:PWRD) to bottom out soon...
LDK Solar (NYSE:LDK) is the second stock on the top of the overbought monitor - yet there is no evidence that the rally is over. Solar stocks have been enjoying a broad rally on the back of strong oil price and increasing demand. JA Solar (NASDAQ:JASO) issued an upped revenue outlook for 2010 Q1 and more solar companies are likely to follow suit.
Most overbought China stock list
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.