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China momentum stocks to shine

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advance_8 August 1, 2011 (Chinavestor) There are no extremely overbought China stocks at the moment. China Mobile (NYSE:CHL) is trading closest to theoretical highs but is far from an extreme position. Stocks with momentum from last week include China Eastern Airlines (NYSE:CEA), Ctrip.com Int. (NASDAQ:CTRP) and AgFeed Industries (NASDAQ:FEED). Earnings will dominate the move of Sohu.com Inc. (NASDAQ:SOHU) from here. Aluminum Corp. of China (NYSE:ACH) has unusual momentum and may continue to go higher. Despite sizable losses, WuXi Pharmatech (NASDAQ:WX) is no oversold and has more downside left. Guangshen Railway (NYSE:GSH) may bottom out, according to the oversold screen.

China Mobile (NYSE:CHL) has been the best performing Chinese telecom after revealing sound smart phone subscriber growth for June. Latest trends suggests China's largest mobile carrier will be able to retain its top position in the 3G arena as well. The stock is looking good from a technical point of view at the moment.

China Eastern Airlines (NYSE:CEA) is not overbought either after pulling back in the second part of last week. There is more upside potential for the stock for the short term.

Ctrip.com Int. (NASDAQ:CTRP) is another stock with momentum from last week. Despite gains, the stock is far from overbought.

AgFeed Industries (NASDAQ:FEED) has been on a roll for over a month and despite the rally, the stock is not overbought. More upside is possible.

Sohu.com Inc. (NASDAQ:SOHU) reported earnings before the opening bell on Monday. The stock is trading lower right now as investors were not impressed. When fundamentals are out, they override technicals and will decide the direction of the stock.

A stock with unusual momentum from last week includes Aluminum Corp. of China (NYSE:ACH). After a ten percent jum in two consecutive days the stock took a breather on Friday. More upside is possible according to the overbought monitor.

OB_201181

WuXi Pharmatech (NASDAQ:WX) fell hard last week but hasn't reached theoreetical ows yet. This impllies more downside is possible.

Guangshen Railway (NYSE:GSH) is looking better after crashing hard last week. The stock moved away from oversold position and is bottoming out.

OS_201181

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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