May 11, 2010 (Chinavestor) There is no overbought China ADR at he moment from a pure technical point of view. Shanda Games (NASDAQ:GAME) advanced +11.31% on Monday triggering the stock to stick out. There has been a dramatic improvement on the oversold end of the China stock universe. Chinese solar stocks and most oversold Ctrip.com (NASDAQ:CTRP) and Wonder Auto (NASDAQ:WATG) from yesterday bounced back up the strongest.
Stocks missing out on Monday's rally include AOB Oriental (NYSE:AOB), GigaMedia Limited (NASDAQ:GIGM), Linktone Ltd. (NASDAQ:LTON) and Actions Semi (NASDAQ:ACTS).
AOB Orinetal (NYSE:AOB) failed to impress investors with her 2010 Q1 report sending shares of the company 1.6% lower for the day. GigaMedia Ltd. (NASDAQ:GIGM) fell -2.8% after a strong open on Monday when the NASDAQ recorded its first triple digit gain ever.
Looking at the overbought end of the China ADR universe, Spreadtrum Comm. (NASDAQ:SPRD), China Unicom (NYSE:CHU), and Baidu.com (NASDAQ:BISDU) are the closes to theoretical highs. Shanda Games (NASDAQ:GAME) stick out but is far from overbought. China Mobile (NYSE:CHL) and Hutch Telecom (NYSE:HTX) are showing strength - but that might be short lived due to the volatile markets.
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.