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China stocks out of momentum

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bear_bull August 2, 2011 (Chinavestor) Home Inns & Hotels Management (NASDAQ:HMIN) jumped over 6% and is on the top of the overbought China stocks screen. Stocks with above average momentum include China Mobile (NYSE:CHL), AgFeed Industries (NASDAQ:FEED) and Aluminum Corp. of China (NYSE:ACH). Interent stocks lost all previous momentum expect for Ctrip.com Int. (NASDAQ:CTRP) - albeit this latter one is trading lower in pre-market trading hours following weak financial report. Ata Inc. (NASDAQ:ATAI) popped over 8% on Monday and moved away from the top of the oversold chart. The stock surrendered that position to WuXi Pharmatech (NYSE:WX). Despite losses, more downside is possible for Guangshen Railway (NYSE:GSH) as well as for CNOOC ltd.(NYSE:CEO), according to the oversold chart.

Back to the overbought screen. There are no overbought China stocks that the moment. The six percent plus jump in the price of Home Inns & Hotels Management (NASDAQ:HMIN) sent the stock higher but is just above its trading range. More upside is possible.

China Mobile (NYSE:CHL) has been resilient and is expected to remain that way as fundamentals back latest sound performance.

The advance may come to a halt for AgFeed Industries (NASDAQ:FEED). The stock has been trading above its trading range for over a week and when market sentiment turn negative, stocks like FEED are vulnerable.

Aluminum Corp. of China (NYSE:ACH) had momentum but that may run dry sooner than later. Despite the one time pop, outlook is uncertain for China's largest maker of the metal.

Ctrip.com Int. (NASDAQ:CTRP) had momentum going into the earnings season but that is about to change for the stock is trading 9% lower in pre-market hours. The company missed revenue guidance and is suffering.

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Ata Inc. (NASDAQ:ATAI) popped and is off the oversold screen. But WuXi Pharmatech (NYSE:WX) is now oversold and is ready to level off at a minimum.

Chinese railway stocks fell hard in Asia on Tuesday, casting shadow over short term outlook for Guangshen Railway (NYSE:GSH).

oil fell below $94 on weak U.S. manumafturing data, boding ill for CNOOC ltd.(NYSE:CEO) on the oversold screen.

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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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