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Overbought energy stock list

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solar3 February 9, 2012 (Chinavestor) Investors have to pay attention to the fact that selected solar stocks became overbought. Jinko Solar (NYSE:JKS) is one of them and downside risk exceeds upside potential for Hanwha SolarOne (NASDAQ:HSOL), ReneSolar Ltd. (NYSE:SOL) and JA Solar (NASDAQ:JASO) as well. Yucheng Technologies (NASDAQ:YTEC), CNOOC Ltd. (NYSE:CEO) and Qiao Xing Univers (NASDAQ:XING) are also ready for a technical correction. Actions Semi (NASDAQ:ACTS) and AirMedia Group (NASDAQ:AMCN) fell had but are not considered oversold yet.

Hopes that Greece will come to terms with creditors helped lift outlook for European economies and Chinese PV makers as well. The EU is the largest export market for Chinese solar makers and any improvement in there was a holy grail for them. But now that there is no agreement yet, overbought PV markets are in danger. Jinko Solar (NYSE:JKS) reached theoretical highs and is trading way above its trading envelope. The stock is over bought and the time is ripe to take profits. The same is true for Hanwha SolarOne (NASDAQ:HSOL), ReneSolar Ltd. (NYSE:SOL) and JA Solar (NASDAQ:JASO). But larger Trina Solar (NYSE:TSL) and Suntech Power (NYSE:STP) are not overbought yet thus their downside risk is smaller.

China's offshore oil producer, CNOOC Ltd. (NYSE:CEO), is considered overbought as well. The stock is trading at 6 months high giving investors a chance to take profits.

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The oversold screen presents two big movers from last week: AirMedia Group (NASDAQ:AMCN) and Actions Semiconductor (NASDAQ:ACTS). While the decline is unusually fast, none of these stocks have reached theoretical lows yet. More downside is possible.

OS_20120209

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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