The oversold screen offers trading extremes of China stocks. Gushan Environmental Energy (NYSE:GU), a bio-diesel producer, fell over 20% since reporting first quarter results. When fundamentals are behind the slide, more downside is possible despite significant losses.
Origin Agritech (NASDAQ:SEED) remains oversold but again, this stock is hurt on fundamentals with little chance of a speedy turnaround.
But fundamentals are different for 51job Inc (NASDAQ:JOBS). The company reported a very strong first quarter and technical weakness is a buy signal. "Buy into weakness" may be the term for the stock right now.
AsiaInfo Holdings (NASDAQ:ASIA) is another solid stock that offers investment opportunity.
Solar stocks fell hard last month but things may change after Germany abandoned nuclear power. Germany, the largest European market for Chinese solar makers, may offer remedy for ReneSola Ltd. (NYSE:SOL) and other oversold Chinese PV makers.
China-Biotics (NASDAQ:CHBT) hit a 52 week low and was considered "junk stock" by some commentators. Despite significant losses, the stock is not oversold yet, according to the following screen. more downside is possible!
There is an over 10% gap for the last month between Shanda Interactive (NASDAQ:SNDA) and its online game unit, Shanda Games (NASDAQ:GAME). The result is that Shanda Interactive (NASDAQ:SNDA) is on the oversold screen. But the stock is not oversold to the extremes, suggesting more downside is possible.
There is no China stock trading at extremes on the overbought China stock screen this morning. Telestone Technologies (NASDAQ:TSTC), Melco Crown Entertainment (NASDAQ:MPEL), China Unicom (NYSE:CHU) and China Mobile (NYSE:CHL) have some noticeable momentum.
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.