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Chinese internet stocks shine, autos hurt

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internet_2 March 24, 2011 (Chinavestor) Sina Corp. (NASDAQ:SINA) is closest to theoretical highs but is not overbought, according to the following chart. Baidu.com Inc. (NASDAQ:BIDU) is another internet heavy weight with sound momentum. Melco Crown Entertainment (NASDAQ:MEPL), an excellent trading stock, is back as well. Petrochina Co. ltd. (NYSE:PTR) and Huaneng Power Int. (NYSE:HNP) are the best NYSE listed Chinese stocks at the moment,

Solar stocks lost their shine, according to the oversold screen. LDK Solar (NYSE:LDK) is considered oversold but China Sunergy (NASDAQ:CSUN), JA Solar (NASDAQ:JASO) and ReneSola Ltd. (NYSE:SOL) have more downside risk. Chinese car parts and related stocks slid as well with more downside risk left for China Automotive Systems (NASDAQ:CAAS) and China XD Plastics (NASDAQ:CXDC).

Back to the overbought screen. Sina Corp. (NASDAQ:SINA) is likely to make a run to the $100 level, a stretch that's viable according to the chart below.

Baidu.com Inc. (NASDAQ:BIDU) is another internet blue chip that's been on fire lately. The stock is trading at all time high of $132 with more upside potential left, according to the overbought chart.

Melco Crown Entertainment (NASDAQ:MEPL), a stock with over 10% rally for the week, is looking good at the moment. Despite recent gains, upside is not limited by technical indicators at the moment.

High oil price lifted shares of Petrochina Co. ltd. (NYSE:PTR), China's largest oil producer. While the stock is not considered overbought, its stock price is subject to fluctuations along the price of oil.

Huaneng Power Int. (NYSE:HNP), the largest Chinese independent power producer, is looking good on the overbought screen as well. But energy and related stocks are sensitive to oil price fluctuations, something sensible investors have to consider.

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The worst might be over for oversold LDK Solar (NYSE:LDK). The stock reached theoretical lows and might bounce back. But losses are not limited to just a few solar stocks; China Sunergy (NASDAQ:CSUN), JA Solar (NASDAQ:JASO) and ReneSola Ltd. (NYSE:SOL) are all among the most oversold Chinese stocks. With oil prices at record, outlook is not that bad for solar stocks.

China Automotive Systems (NASDAQ:CAAS) tumbled along with Wonder Auto Technologies (NASDAQ:WATG) and China XD Plastics (NASDAQ:CXDC). Some fear that auto sales will remain soft as goverment incentives expire, hurting the sector. But it just may be an opportunity for value investors to pick up auto related stocks at bargain price.

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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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