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Airliners, trading stocks offer upside

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think_1 June 27, 2011 (Chinavestor) China Mobile (NYSE:CHL) became overbought and is ready to take a breather, says the overbought China stock monitor below. Canadian Solar (NASDAQ:CSIQ) has unusual momentum and may slow down, but short-term upside remains mixed for China Automotive Systems (NASDAQ:CAAS) or Melco Crown Entertainment (NASDAQ:MEL) despite latest gains. China Southern Airlines (NYSE:ZNH) and smaller rival China Eastern Airlines (NYSE:CEA) are looking good on the overbought chart below. Stocks of interest on the oversold monitor include Giant Interactive (NYSE:GA), Huaneng Power International (NYSE:HNP), 3S Bio Inc. (NASDAQ:SSRX), Shanda Games (NASDAQ:GAME) and Linktone (NASDAQ:LTON).

Back to the overbought screen. China Mobile (NYSE:CHL) has reached theoretical highs and is ready to give back some of those gains. But overbought is not bearish but implies that the stock has advanced too much, too fast. The stock may resume a rally after a short-term technical correction.

Canadian Solar (NASDAQ:CSIQ) isn't oversold to the extremes yet but the sudden increase casts doubt over additional short time advance.

China Automotive Systems (NASDAQ:CAAS) rose over 10% last Friday and is up 23% for last week. Despite sizable gains, the stock is not overbought! Considering the huge underlying volume, more upside is possible.

Melco Crown Entertainment (NASDAQ:MEL) is an excellent trading stock that has shown momentum lately.

Falling oil prices bode well for Chinese airliners. China Southern Airlines (NYSE:ZNH) and China Eastern Airlines (NYSE:CEA) have shown some momentum lately but upside is not limited at this point. Both stocks are looking good on Monday.

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Cleantech Solutions (NASDAQ:CLNT) is a low volume stock that renders the oversold indicator inaccurate. Loss of confidence into upcoming earnings have hurt Giant Interactive (NYSE:GA) and there is no sign of any buying interest at this time.

Huaneng Power International (NYSE:HNP) is trading at over 5 year lows and is oversold. The stock offers value for the long term buyer at this point. Despite a weak technical reading, short term outlook remains dim.

Despite recent steep losses, downside risk prevails for 3S Bio Inc. (NASDAQ:SSRX), Shanda Games (NASDAQ:GAME) and Linktone (NASDAQ:LTON).

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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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