September 1, 2010 (Chinavestor) Vanceinfo Technologies (NYSE:VIT), Spreadtrum Communications (NASDAQ:SPRD), and Huaneng Power (NYSE:HNP) are the most overbought China stocks, followed closely by Acorn International (NYSE:ATV). While these stocks are not in the danger zone, their upside is limited should bears grab the horn of the market.
A-Power Energy Generation Syst. (NASDAQ:APWR) is definitely oversold just like KongZhong Corp. (NASDAQ:KONG). Large cap China Life Insurance (NYSE:LFC) is a value stock bargain hunters might want to consider...
Back to the overbought screen: Vanceinfo Technologies (NYSE:VIT) jumped to the top of the overbought China stock list thanks to an advance four days in a row. The stock is also at 52 week high, suggesting momentum won't dry up right away...
Spreadtrum Communications (NASDAQ:SPRD) jumped 12.9 percent on Tuesday with volume five times average.. a very positive sigh. The stock hasn't reached theoretical highs yet, suggesting more room left to the upside.
Even a three percent jump pushed sleepy Huaneng Power International (NYSE:HNP) into the spotlight on Tuesday. But remember, large cap stocks list this - HNP is China's largest independent power generator - don't get overbought all the way. Upside potential looks limited for the stock for the short term.
Volatile Acorn International (NYSE:ATV) added another 4.1 percent on top of the gains of the past four trading sessions. Downside risk exceeds upside potential for this stock at this moment...
A-Power Energy Generation Systems (NASDAQ:APWR) is on top of the oversold screen, and is presenting a turnaround opportunity. KongZhong Corp. (NASDAQ:KONG) is even more extreme, the stock has been eroding since January 2010. Somewhere it has to hit bottom, according to the oversold chart below.
Large cap China Life Insurance (NYSE:LFC) is another stock to watch. The stock might be a good buy given her market cap and status - this stock won't get down to the pennies... Value buyers should consider this stock seriously.
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.