April 22, 2010 (Chinavestor) There isn't any overbought China stock, technically speaking. Stocks with unusual momentum include China Finance Online (NASDAQ:JRJC), Cogo Group (NASDAQ:COGO), and China Unicom (NYSE:CHU). But don't expect these stocks to do well on Thursday automatically. China Unicom (NYSE:CHU) fell hard in Hong Kong earlier today, suggesting a similar trading patter is likely to happen on the NYSE today.
Stock that is expected to shine is China Eastern Airline (NYSE:CEA) - a far from overbought China play as the following screen testifies.
Most overbought China stocks
Interesting stocks on the oversold screen include Canadian Solar (NASDAQ:CSIQ) - presenting a turnaround opportunity for Friday. Energy prices are down on strong dollar, but that might change tomorrow, suggesting CSIQ is going to bounce back up strongly on Friday. China BAK Battery (NASDAQ:CBAK) and China Natural Resources (NASDAQ:CHNR) are oversold but will not shine when markets are heading south.
Most oversold China 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.