Back to the overbought screen. Baidu.com Inc. (NASDAQ:BIDU) is clearly trading above its trading envelope but hasn't reached theoretical highs yet. This bodes well for the stock. BIDU has been driven by fundamentals following a rock solid 2010 Q4. Now it's time for other internet stocks to step up to the place to keep the rest of the sector moving higher.
Ctrip.com International (NASDAQ:CTRP) just reported before the open on Monday - and will move the rest of the sector!
NetEase.com Inc. (NASDAQ:NTES) is trading above its trading range- similarly to Baidu.com Inc. (NASDAQ:BIDU) - but has more upside left as well.
JA Solar (NASDAQ:JASO) possesses the best momentum among Chinese solar stocks at the moment. Yingli Green Energy (NYSE:YGE) is going to report earnings on Friday, opening up the season for the solar sector. More run-up is quite possible for Trina Solar (NYSE:TSL) and JASO as well.
Shanda Interactive Entertainment (NASDAQ:SNDA) went sideways on Friday after becomeing overbought. The size of the arrow suggests downside risk still keeps the stock under pressure.
China's largest mobile carrier, China Mobile (NYSE:CHL) is clearly overbought. Not only did the stock fall hard but has reached theoretical lows in addition. The same is true for WuXi Pharmatech (NYSE:WX), another stock with more upside potential than downside risk.
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.