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Chinese solar, internet stocks suffer the most

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price_1 May 25, 2011 (Chinavestor) There isn't much change on the overbought end of the China stock universe. In fact, it's hard to find any overbought stocks - except for China Fire & Security (NASDAQ:CFSG). But the oversold end is full of action, China Green Agriculture (NYSE:CGA), Sohu.com Inc. (NASDAQ:SOHU), Sina Corp. (NASDAQ:SINA), Vanceinfo Technologies (NYSE:VIT) are oversold. The Chinese solar sector is hit hard as well, China Sunergy (NASDAQ:CSUN) with the most unusual move, according to the oversold screen.

 

First let's take a look at the overbought screen. China Fire & Security Group (NASDAQ:CFSG) is going private, initiating the jump. With fundamentals moving the stock, the overbought chart is really not indicative at all at this time.

OB_2011525

China Green Agriculture (NYSE:CGA) experienced a large down-tick on Tuesday, sending the stock diving. But the fall is out of proportion as the following chart suggests. But investors have to consider that the down tick was accompanied by huge volume at he same time.

Internet stocks, Sohu.com Inc. (NASDAQ:SOHU) and Sina Corp. (NASDAQ:SINA), continue to suffer. Both stocks are considered oversold, suggesting the bottom is near.'

Vanceinfo Technologies (NYSE:VIT) fell hard and is oversold. But when a stock falls apart following earnings release, comeback is unusually not that fast.

China Sunergy (NASDAQ:CSUN) is trading way below its trading range, making it the most oversold among Chinese solar makers. The sector is falling apart following weak demand and uncertain outlook. For a list of the most oversold Chinese solar stocks, visit the chart below.

OS_2011525

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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