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China stock extremes to watch on August 30

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think_1 August 30, 2010 (Chinavestor) Hurray! Holding (NASDAQ:HRAY) transformed Ku6 Media Co (NASDAQ:KUTV) jumped out of the overbought monitor last Friday. Pace of V-shaped recovery for Acorn International (NYSE:ATV) is about to ease, but Chinese solar stocks and some resource plays have more room left to the upside - according to the overbought monitor. Trina Solar (NYSE:TSL), a prominent solar play, is far from theoretical highs, just as Silvercorp. Metals (NYSE:SVM), Zhongpin (NASDAQ:HOGS) is not at extremes either despite sizable advance last week. But downside risk looks exceeding upside potential for Vanceinfo Technologies (NYSE:VIT). CNOOC Ltd. (NYSE:CEO), China's offshore oik specialist, has more upside, especially when oil is above $75/barrel.

Stocks with a possible bounce back up include Actions Semiconductor (NASDAQ:ACTS), and China Information Technology, Inc.(NASDAQ:CNIT). China Life Insurance (NYSE:LFC) is oversold but Monday might not be the day of comeback.

Details: volatile Ku6 Media (NASDAQ:KUTV) jumped on name change last week while investors dropped China Information Technology, Inc.(NASDAQ:CNIT) formerly (NASDAQ:CPBY). While KUTV looks overbought CNIT looks oversold, suggesting China Information Technology, Inc.(NASDAQ:CNIT) is the better buy on Monday.

Acorn International (NYSE:ATV) advanced too fast, too much, according to the overbought monitor, and might be for a slower recovery from now on. Stocks with sustainable advance inlcude Silarcorp Metals (NYSE:SVM) and Trina Solar (NYSE:TSL), according to the overbought monitor below. Both stock reported solid second quarter reports last week.

Zhongpin Inc. (NASDAQ:HOSG) is a volatile and explosive China play. Current technical reading suggests more upside is possible!

Another NYSE listed heavy weight, CNOOC ltd. (NYSE:CEO) is drawing attention on Monday. The stock is looking good from a technical point of view: far from theoretical highs yet boosting solid fundamentals. Another stock to keep your eye on.

OB_2010830

China Life Insurance (NYSE:LFC) is the most oversold China play, but most of the weakness is due to her lackluster second quarter earnings report. The company is under pressure as investment returns shrank substantially in 2010. Outlook is dependent upon the performance of the Shanghai Composite Index (SHA:000001), an index that way outperformed investors' expectations in 2010 so far.

Actions Semiconductor (NASDAQ:ACTS) fell hard last week and is trading well below her trading envelope. A possible technical correction is looming around...

The same is true for China Information Technology, Inc.(NASDAQ:CNIT), another NASDAQ listed china play. Risky investors better pay attention to this stock now.

OS_2010830

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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