April 4, 2012 (Chinavestor) News that China's online game market is expected to grow by 38% send shares of Shangda Games (NASDAQ:GAME) surging. Despite a 11.5% advance in the last few days, more upside may be possible for the stock hasn't reached theoretical highs yet. E Commerce China Dangdang Inc. (NYSE:DANG) took a breather on Tuesday after a big run a day before and is looking good on the overbought chart again. Chinese solar stocks continue to fall and are led by ReneSolar (NYSE:SOL), according to the oversold monitor on the bottom of the page. LDK Solar (NYSE:LDK) and Trina Solar (NYSE:TSL) are aslo among the 25 most oversold Chinese stocks, scroll down to see their technical reading.
ReneSola Ltd. (NYSE:SOL) is trading closest to theoretical lows suggesting the stock is oversold. The company lost 30% of its value in just five days!
Weakness is not stock specific, solar stocks are falling on increasing European risk as Spain's borrowing cost is on the rise again. LDK Solar (NYSE:LDK) and Trina Solar (NYSE:TSL) are also on the list but are not oversold. Both are trading under their trading envelope in a relatively tight range.
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.