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SOHU, CHLN today's extremes

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money_3 March 28, 2014 (Chinavestor) Today's technical indicator picked up one extremely overbought and one extremely oversold China play. These are China Housing & Land Development (NASDAQ:CHLN) and Sohu.com Inc. (NASDAQ:SOHU). Other stock extremes include SouFUn Holdings (NYSE:SFUN), Seaspan Corp. (NYSE:SSW), Ku6 Media (NASDAQ:KUTV), and Melco Crown Entertainment (NASDAQ:MPEL).

Additional stocks of interests on the overbought monitor include Huaneng Power Intl. (NYSE:HNP) and Petrochina Co. Lt.d (NYSE:PTR).

Taking a closer look at the oversold indicator reveals secrets. Sohu.com Inc. (NASDAQ:SOHU) reached theoretical lows and is clearly oversold. The stock is trading well below its trading envelope at unusually low prices.

This is different from other Chinese stocks trading close to the OS position. Sohu fell from the middle of the trading range to way below it. Canadian Solar (NASDAQ:CSIQ) is simply lacking momentum and has been close to OS position for a long time.

VisionChina Media (NASDAQ:VISN) is somewhat similar to Sohu.com Inc. (NASDAQ:SOHU) but she hasn't reached theoretical lows yet.

SouFun Holdings (NYSE:SFUN) and Seaspan Corp. (NYSE:SSW) fell hard way below normal trading range. Ku6 Media (NASDAQ:KUTV) and Melco Crown Entertainment (NASDAQ:MPEL) are also stock of this category. The difference between these and Sohu is that the latter has reached theoretical lows already! 

ADR_OS_20140328

Overbought stock extremes are few. China Housing & Land Development (NASDAQ:CHLN) is clearly overbought. The only thing that should concern investors is the trading quality of this stock. CHLN is low volume, low market cap play that makes technical indicator inaccurate.

The same monitor picked up unusual advance of Huaneng Power Intl. (NYSE:HNP) and Petrochina Co. Ltd. (NYSE:PTR). These stocks have had momentum, not sure how much more has left...

ADR_OB_20140328

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.

 

aa_OBOS_expl_2weeks



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