April 1, 2011 (Chinavestor) High oil prices continue to support Petrochina Co. Ltd. (NYSE:PTR) and the rest of the energy sector. Trina Solar (NYSE:TSL) is the best performing Chinese solar stock, according to the overbought screen, but the sector may find additional support in the wake of the Fukushima incident and high oil prices. 3SBio Inc. (NASDAQ:SSRX) and 51job Inc. (NASDAQ:JOBS) are trading well above their trading ranges, limiting short term upside potential. Sina Corp. (NASDAQ:SINA) has hit a temporary ceiling in the past three days, as the following chart testifies. Upside is not limited for internet stocks like NetEase.com Inc. (NASDAQ:NTES) or Baidu.com Inc. (NASDAQ:BIDU) according to the overbought chart. Home Inns & Hotels Management (NASDAQ:HMIN) is looking good with little downside risk.
Petrochina Co. Ltd. (NYSE:PTR) is overbought but when oil prices go higher, energy stocks follow. Yanzhou Coal Mining (NYSE:YZC) is less overbought giving it more room to the upside on Friday. But one has to ask how long the rally will last and might take profits on Friday.
Trina Solar (NYSE:TSL) is the best performing solar play, according to the overbought screen. But there is a lot of upside left for the sector based on fundamentals. High oil prices and the nuclear accident make a strong case for the sector.
Stocks of interest are 3SBio Inc. (NASDAQ:SSRX) and 51job Inc. (NASDAQ:JOBS)on the following screen. These stocks have stepped out of their normal trading range and are getting vulnerable to a market decline. But when market sentiment is sound, expect these to to extend the rally.
Sina Corp. (NASDAQ:SINA) rose over 30% in March and is trading at all time highs. But after a three day breather, the stock is readying for more upside.
Stocks with little downside risk from the internet sphere include NetEase.com Inc. (NASDAQ:NTES) and Baidu.com Inc. (NASDAQ:BIDU). Despite recent gains, both stocks looks to have additional upside left.
Home Inns & Hotels Management (NASDAQ:HMIN) may give another run to the $41 level in the coming days.
Stocks with a chance to bounce back are China Housing & Land Development, Inc. (NASDAQ:CHLN) and Spreadtrum Communications (NASDAQ:SPRD). Both these stocks have reached theoretical lows and might pop up.
But outlook is not good for China Integrated Energy (NASDAQ:CBEH) and Advanced Battery (NASDAQ:ABAT) for these stocks fell on allegations of financial wrongdoings, something that will keep them down for a prolonged time.
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.