February 5, 2014 (Chinavestor) Most extremely oversold Chinese stocks bounced back. Baidu Inc. (NASDAQ:BIDU) is one of the best trading stock for it advanced as much as $5.30. Naturally, BIDU is not extremely oversold as a result. Other stocks bouncing off extreme oversold position include Sina Corp. (NASDAQ:SINA) and Ctrip.com International (NASDAQ:CTRP).
But it wasn't an easy day for many Chinese stocks. Sohu.com Int. (NASDAQ:SOHU), Sinopec Shanghai Petrochemcial (NYSE:SHI) and China Ming Yang Wind Power (NYSE:MY) failed to advance and are showing poorly on the oversold screen.
The same goes for China Automotive Systems (NASDAQ:CAAS) and Synutra International (NASDAQ:SYUT). These are the two most oversold Chinese stocks of the day. Lack of momentum is settling in for CAAS and SYUT according to the oversold monitor below.
This is different from New Oriental Education (NYSE:EDU), a stock that was extremely oversold after Monday's bloodbath but advanced the next day. See the oversold chart for details.
Finally, there are no China plays to watch on the overbought China stock monitor. See second chart for details.
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.