Back to the overbought screen. New stock from last week on the overbought screen include SouFun Holdings (NYSE:SFUN). The stock is still within its trading range and is open for more upside.
Xinyuan Real Estate Co. (NYSE:XIN) had a couple of sound days last week but despite 17% run in the last two days, more upside is possible. The stock is far from theoretical highs and has just stepped out of its trading range.
China Unicom (NYSE:CHU) has been one of the best performing Chinese mobile stock YTD. The stock has just stepped out of its trading range and is far from overbought.
Melco Crown Entertainment (NASDAQ:MPEL), a great trading stock with ample volume, is back in town. When markets do well, so is Melco. More upside is possible but investors have to be careful and taking profits on time. The stock is volatile and can evaporate gains just as quickly.
Yanzhou Coal Mining (NYSE:YZC) has shown unusual momentum lately but again the stock is far from theoretical highs and has more upside potential left.
Looking at the most oversold China stocks this morning, WSP Holdings (NYSE:WH), Origin Agritech (NASDAQ:SEED) and Chindex International (NASDAQ:CHDX) are looking alike. But despite a technical weakness, fundamentals are behind the fall and as such, a bounce back up may have to wait.
Despite a 30% plus dive last week, more downside is looming around China Green Energy (NYSE:CGA). The stock fell as speculation spread that the company has done some financial wrongdoings. The stock is far from theoretical lows and is susceptible for more beating.
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.