Taking a quick look at the overbought screen reveals that there is no China stock trading at an extreme overbought position. This bodes well for momentum stock like Fushi Copperweld (NASDAQ:FSIN) and City Telecom (NASDAQ:CTEL). Large cap Huaneng Power International (NYSE:HNP) and Sinopec Corp. (NYSE:SNP) has additional upside left as well.
And just how well the overbought screen can work, consider Telestone Technologies (NASDAQ:TSTC) a stock that got overbought to the extremes earlier the week and it tumbled as predicted. The stock is looking good now to resume going higher, albeit investors shouldn't take that move granted.
Stocks with sufficient volume on the oversold screen include Melco Crown Entertainment (NASDAQ:MPEL). The stock is not oversold to the extremes and thus a turnaround is not granted.
Sina Corp. (NASDAQ:SINA) fell 10% following earnings announcement but that decline was partially due to weak market sentiment. Now that index futures point to a higher open, Sina Corp. (NASDAQ:SINA) can recover those losses.
WuXi Pharmatech (NYSE:WX) is another stock that can make a turnaround.
Online gamers and solar stocks are hurting right now. Changyou.com Ltd. (NASDAQ:CYOU) and Perfect World (NASDAQ:PWRD) are not oversold to extremes but are missing momentum. But that may change for these stocks are trading at a discount.
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.