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What's up with TUDO, YOKU, EDU and SINA?

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internet_2 July 5, 2012 (Chinavestor) There is a lot more action of the oversold screen than on the overbought one today. We have the following heavy hitters for today: Tudou Holding (NASDAQ:TUDO), New Oriental Education (NYSE:EDU), Renren Inc. (NASDAQ:RENN) and Sina Corp. (NASDAQ:SINA), among others. But first let's just take a look at the overbought monitor. Fushi Copperweld (NASDAQ:FSIN) surged over 30% in the last five trading days, but the good news is that the stock is not considered overbought! Current stock price is far from theoretical highs thanks to its steady advance in the last three days. All the other stocks on the overbought screen are trading within reasonable trading ranges.

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It may be Tudou Holding (NASDAQ:TUDO) trading closest to theoretical lows, but New Oriental Education (NYSE:EDU) is a lot more oversold. This implies that New Oriental Education (NYSE:EDU) is bottoming out while more downside risk looms over Tudou Holding (NASDAQ:TUDO).

Similarly to Tudou Holding (NASDAQ:TUDO), Youku Inc. (NYSE:YOKU) swung from the high end of the trading envelope to the low one. But this should be no surprise given YOKU's involvement in TUDO's business.

Shares of Renren Inc. (NASDAQ:RENN) and Sina Corp. (NASDAQ:SINA)took a similar turn, both stocks are trading at the lower end of their trading envelopes. But with theoretical low prices far, there is more downside within the cards for them.

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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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