January 14, 2011 (Chinavestor) With no overbought China stocks to speak of, technically speaking, outlook looks bright for most China stocks today. But weak jobs numbers are hurting market sentiment, capping gains for promising Chinese stocks. Shanda Games (NASDAQ:GAME), the second largest online game operator and developer, definitely has momentum according to the chart below. AgFeed Industries (NASDAQ:FEED), Suntech Power (NYSE:STP) and Sina Corp. (NASDAQ:SINA) are trading the closest to theoretical highs but have room left to the upside.
Petrochina Co. Ltd. (NYSEPTR) and Trina Solar (NYSE:TSL) are looking good on the overbought chart below, as well.
51job Inc. (NASDAQ:JOBS) and Melco Crown Entertainment (NASDAQ:MPEL) pulled back after getting overbought earlier the week. Now they might be able to resume heading north, again.
Silvercorp. Metals (NYSE:VM) fell almost 20% from last week , a highly unusual drop for the company. Wish shares now oversold, investors with finesse may be able to make some quick profits.
The rest of the China stocks universe is not oversold, according to the chart below.
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.