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Earnings propel China stocks in March

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money_4 March 4, 2011 (Chinavestor) The sudden jump in KongZhong Corp. (NASDAQ:KONG) was significant yet the stock is not considered overbought yet. China TechFaith Wireless (NASDAQ:CNTF) is overbought though according to the following chart. Shanda Games (NASDAQ:GAME) has more upside left, similarly to Mindray Medical (NYSE:MR). There hasn't been much change on the oversold end of the China stock universe from yesterday. 3SBio (NASDAQ:SSRX) remains oversold but ChinaCast Education (NASDAQ:CAST) is off the list thanks to a sizable rally on Thursday.

Strong earnings helped KongZhong Corp. (NASDAQ:KONG) to break the $8 resistance level and now $9 is within reach. The stock hasn't reached theoretical highs yet and has more upside left despite a significant rally on Thursday.

Shanda Games (NASDAQ:GAME) pulled back after a 18.8% surge on Wednesday. But the rally was driven by fundamentals, suggesting more upside is possible should market sentiment improve.

Mindray Medical (NYSE:MR) is another company with sound Q4 numbers on its back. More upside is possible for this under appreciated stock as well.

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3SBio (NASDAQ:SSRX) is considered oversold with little downside risk. ChinaCast Education (NASDAQ:CAST) popped on Thursday effectively removing it from the most oversold China stock list.

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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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