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Solar, technology stocks remain explosive

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happy October 21, 2011 (Chinavestor) Investors should pay attention to the oversold screen not to the overbought one before the EU summit this weekend. Solar and technology stocks of interest include China Sunergy (NASDAQ:CSUN), LDK Solar (NYSE:LDK) and Canadian Solar (NASDAQ:CSIQ). Internet / technology stocks on the oversold screen include Changyou.com Ltd. (NASDAQ:CYOU), Ctrip.com Inc. (NASDAQ:CTRP) and 51job Inc. (NASDAQ:JOBS).

 

Investors know that high beta stocks are the ones that really move. Should the EU summit deliver tangible results in solving the continent's sovereign debt crisis, oversold volatile stocks have a very strong case.  Looking at the oversold screen, we can't miss China Sunergy Co. Ltd. (NASDAQ:CSUN). The stock is trading way below its trading range, making it ripe for a comeback. On the downside, the stock hasn't reached theoretical lows yet and may continue to fall. It all depends on market sentiment. LDK Solar (NYSE:LDK) is not oversold but is trading close enough to theoretical lows to get on oversold the list today. Needless to say the stock has huge upside potential, if and if markets receive EU summit news well. Same is true for Canadian Solar (NASDAQ:CSIQ). And while not on the chart but Suntech Power (NYSE:STP) and Yingli Green Energy (NYSE:YGE) are looking just like the rest of the sector.

Chinese technology stocks offer upside potential as well. Smart traders got to love Changyou.com Ltd. (NASDAQ:CYOU). The stock went from $24 to $34 earlier the month just to fall back to $27 yesterday. Chinavestor Premium members got a chance to make quick profits off the stock two weeks ago. We sent out an email alert on October 10 saying  that "Changyou.com Ltd. (CYOU) surged to $30.62 or 7.6% since Friday. Again, lock in profits."

Other volatile stocks that offer trading opportunities include Ctrip.com Int. (NASDAQ:CTRP) and 51job Inc. (NASDAQ:JOBS). While both stocks are not oversold to the extremes, chances are that they will surge once markets receive some good news from Europe.

And to see just how volatile Ctrip.com (NASDAQ:CTRP) or Changyou.com Ltd. (NASDAQ:CYOU) is, take a look at a list of Chinese stocks, listed by their BETA or volatility. Low risk stocks in turbulent times

OS_20111021

Small cap, low volume stocks continue to rule the overbought screen. The problem is that technical indicators don't work well for these kinds of stocks. That said more upside is possible for Spreadtrum Communications (NASDAQ:SPRD), one of the most liquid manes on the list below.

OB_20111021

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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