June 14, 2012 (Chinavestor) Investors don't have to look far to find stocks on the move on Thursday. Youku Inc. (NYSE:YOKU), China's largest online video content provider, is on the move along with Huaneng Power Int. (NYSE:HNP). China's largest independent power producer is back in the game as price of coal is in free fall in China, improving margins for utility companies. China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH) are also on the overbought screen albeit these stocks are far from extreme overbought position. As a matter of fact both CEA and ZNH succumbed to profit taking in Hong Kong this morning, foretelling a similar move on the NYSE today.
eLong Inc. (NASDAQ:LONG) is considered oversold and is ready to make a comeback, according to the chart below. Visit the chart below for additional stocks for bottom fishing.
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.