August 12, 2011 (Chinavestor) Despite some unusual surges, the overbought China stock monitor looks calm. Xinyuan Real Estate (NYSE:XIN) hasn't reached theoretical highs yet and has more upside left according to the overbought monitor. Giant Interactive (NYSE:GA) stepped way above its trading range while China Southern Airlines (NYSE:ZNH) trimmed earlier losses and is back on the screen again. Oversold AsiaInfo-Linkage (NASDAQ:ASIA) is off the oversold monitor after a remarkable surge on Thursday. Investors may wonder which oversold China ADR would come next. Linktone (NASDAQ:LTON), China Automotive Systems (NASDAQ:CAAS) and Shanda Games (NASDAQ:GAME) look ready to pop. But oil major Petrochina Co. Ltd. (NYSE:PTR) is still hurting with no signs of any quick rebound. Mindray Medical (NYSE:MR) is oversold but that's due to a weak 2011 Q2 report and is not expected to make a comeback right now.
Taking a close look at the overbought monitor, Xinyuan Real Estate (NYSE:XIN) is the first stock that catches investors' attention. The company reported a "triple play", beating revenue and earnings expectations plus guiding higher for the third quarter. Health of the real estate sector helped lift China Housing & Land Development (NASDAQ:CHLN), a stock that hit bottom earlier the week. Despite a 40% plus surge on Thursday, the stock is not overbought yet.
Giant Interactive (NYSE:GA) is trading above its trading range and might loose steam. The company reported sound revenue growth but incurred significant losses on the same time.
Unlike Giant Int. (NYSE:GA), fundamentals are sound for China Southern Airlines (NYSE:ZNH). The largest Chinese airliner by fleet size is supported by lower oil prices. China Eastern Airlines (NYSE:CEA) is on the heels of its larger rival. And what's good for airliners is bad for oil producers, as the oversold position of Petrochina Co. Ltd. (NYSE:PTR) testifies.
One of the most oversold China stock earlier the week, AsiaInfo-Linkage (NASDAQ:ASIA), surged 23.68% on Thursday! Investors shunned China Automotive Systmes (NASDAQ:CAAS) before earning release on Thursday. Revenue and earnings growth remained flat for the company.There is a chance for a comeback for the company is still profitable.
Shanda Games (NASDAQ:GAME) may surprise investors to the upside when it reports earnings. There is a chance for a pop for the company is ovesold at the moment.
Investors didn't like what Mindray Medical (NYSE:MR) had to say about second quarter. While revenues grew net income was flat. But the company is looking good overall and may bottom out at around current prices.
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.