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Largest Chinese Gap Ups and Downs

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buy-sell June 24, 2011 (Chinavestor) Running the overbought and oversold monitor in an unusual way, we wanted to see which Chinese stock moved the most at the open. The reason for the unusual measure is due to the fact that index futures pointed to a higher open but then it all changed for worse... The DJIA lost 60 points by 10:00 AM on weak economic outlook. Stocks with the most advance are of special interest today: these stocks might prove to be resilient for the long haul to negative market sentiment.

With that in mind, Chinese telecoms seem to be the best bet against a global sell-off. China Telecom (NYSE:CHA) and its larger mobile rival China Mobile (NYSE:CHL) have been weathering the storm the best. Trading stock China Automotive Systems (NASDAQ:CAAS) and Melco Crown Entertainment (NASDAQ:MPEL) are wild horses - might turn around quickly. But investors should pay attention to the relatively good performance of low beta (low risk) stocks such as Sinopec (NYSE:SNP) China Life Insurance (NYSE:LFC), China Eastern Airlines (NYSE:CEA) and Guangshen Railway (NYSE:GSH). Sina Corp. (NASDAQ:SINA) is bouncing back off from an extreme oversold position earlier the week.

Weakness of the solar sector is a bad spell for Suntech Power (NYSE:STP) or JA Solar (NASDAQ:JASO). Ctrip.com Int. (NASDAQ:CTRP) and 51job Inc. (NASDAQ:JOBS) are weak at the open, highlighting the loss of confidence into the once mighty Chinese internet sector.


Going back to those Chinese stocks that gaped up the most at he open, Chinese telecoms are shining. China Telecom (NYSE:CHA) advanced 2.2% at the open as investor found safety in the sector. The world largest mobile carrier, China Mobile (NYSE:CHL) is another safe stock, investors think at the moment.

China Automotive Systems (NASDAQ:CAAS) jumped on operating results (10-K/A) and is a trading stock with sufficient momentum.Melco Crown Entertainment (NASDAQ:MPEL) is similar to CAAS in may respect. Both have been very volatile with lot of money to be made or lost...

Sinopec (NYSE:SNP), China's largest refiner, is up but CNOOC Ltd. (NYSE:CEO) is sharply lower after the open. When price of oil falls, as has been the case lately, margins for refiners improve but oil producers are hurt. If the trend is to continue, SNP is going to shine but CNOOC Ltd. (NYSE:CEO) and Petrochina (NYSE:PTR) are going to be under pressure.

China Life Insrurance (NYSE:LFC) is up today but that might be due to a press release indicating that LFC is moving into the fast growting non-life insurance business. China Life Expands into Non-Life Insurance.

Oversold China Eastern Airlines (NYSE:CEA) are up on lower oil and is expected to gain should kerosene prices subside.

Guangshen Railway (NYSE:GSH) has been a steady player lately and will remain so, investors think according to the chart below.

Sina Corp. (NASDAQ:SINA) was the most oversold China play earlier the week, up until the spectacular 18.5% rally. But taking a breather on Thursday the stock is ready to go again.

OB_2011624

Suntech Power (NYSE:STP) and JA Solar (NASDAQ:JASO) are among those China stocks that suffered the most at the open. This is bad news for the rest of the industry for the short term...

Internet darling fell hard, such as Ctrip.com Int. (NASDAQ:CTRP) and 51job Inc. (NASDAQ:JOBS). Investors are digesting the latest round of IPOs and their fall-out (RENN, YOKU, QIHU). Not much support is seen for going forward...

OS_2011624

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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