May 21, 2012 (Chinavestor) Shares of China Unicom (NYSE:CHU) bounced 1.3% on Friday, moving it away from the top of the oversold China stock list. Jiayuan.com Int. (NASDAQ:DATE) fell hard before earnings on Wednesday, creating opportunity for the risky investor. Should DATE beat estimates, upside potential looks huge. But it seems like investors might know something before actual numbers came out.
Vanceinfo Tech (NYSE:VIT) is way oversold as the following chart testifies. The stock fell after reporting earnings but the slide looks excessive at this point.
Chinese solar stocks fell hard after the US slammed a 31% tarriff on them. This is another sector with a chance for a swing back.
Huaneng Power (NYSE:HNP) continued to outperform the market. The stock rose 2.3% last week along with NetEase.com Inc. (NASDAQ:NTES), another stock defying negative trends. Needless to say none of them are overbought at this time.
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.