September 20, 2011 (Chinavestor) Small cap Gushan Energy (NYSE:GU) may look overbought but technical indicators work best for larger stocks. China Green Agriculture (NYSE:CGA) is having a good time and investors seem to get used to the latest advance of the stock. Oversold stocks of to watch today include Changyou.com Ltd. (NASDAQ:CYOU) and its former parent, Sohu.com (NASDAQ:SOHU). The fall of Chinese airliners is captured by the oversold monitor, China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH) are hurting.
China Green Agriculture (NYSE:CGA) became overbought yesterday and we said that "China Green Agriculture (NYSE:CGA) and Gushan Environmental Energy (NYSE:GU) are the two overbought China stocks today. Chances are that they will take a break on Monday." China stock extremes on Sept 19 . China Green Agriculture (NYSE:CGA) did and is now neutral on the overbought screen.
Spreadtrum Communications (NASDAQ:SPRD) is another interesting stock today. The stock has more downside potential than upside risk.
Changyou.com Ltd. (NASDAQ:CYOU) is trading closest to theoretical lows and may pop. Weakness of the stock hurt its largest shareholder, Sohu.com (NASDAQ:SOHU) as well. Perfect World (NASDAQ:PWRD) is oversold but not to the extremes. This suggests the stock is not ready to bottom out just yet.
Chinese airlines are not oversold either. China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH) have fallen hard but there is more left to the downside. But more suffering is not granted for price of oil is falling, helping airliners.
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.