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Oversold China stocks of interest, June 6

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bubble_1 June 6, 2011 (Chinavestor) There has been a lot of change on the oversold China screen from last Friday. Spreadtrum Communications (NASDAQ:SPRD), City Telecom (NASDAQ:CTEL) and UT Starcom (NASDAQ:UTSI) are now on opt of the list. Surprisingly, Sina Corp. (NASDAQ:SINA) and Sohu.com Inc. (NASDAQ:SOHU) are following the most oversold China stock very closely. The steep fall of Asiainfo holdings (NASDAQ:ASIA), Origin Agritech (NASDAQ:SEED) and Zhongpin Inc. (NASDAQ:HOGS) didn't go unnoticed by the oversold indicator either. There is no overbought China stock to speak of at the moment. Spreadtrum Communications (NASDAQ:SPRD) accelerated lower on Friday but may hit a bottom soon, according to the oversold chart below. City Telecom (NASDAQ:CTEL) and UT Starcom (NASDAQ:UTSI) are looking very similar to SPRD from a technical point of view.

The relatively poor performance of Sina Corp. (NASDAQ:SINA) is clearly shown on the oversold monitor. Sohu.com Inc. (NASDAQ:SOHU), another internet darling, fell below the 200 DMA as well. Both stocks have been trading in a narrow range lately. Downside risk is less for Sina Corp. (NASDAQ:SINA) according to the oversold chart right below.

AsiaInfo Holdings (NASDAQ:ASIA) fell to 52 week lows but more downside is possible as the following chart testifies. The stock hasn't reached theoretical lows yet.

The same is true for Origin Agritech (NASDAQ:SEED), a stock that fell hard but more downside risk persists.

Zhongpin International (NASDAQ:HOGS) fell apart last Friday but despite a double digit percentage fall, the stock hasn't established a bottom yet.

OS_201166

Acorn International (NYSE:ATV) surged last Friday after a tender offer, making it the most interesting China stock on the overbought screen.

OB_201166

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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