April 7, 2014 (Chinavestor) There are a good number of unusual stock price changes according to the overbought as well as the oversold China stock monitor. Some ovesold China stocks offer trading opportunity should market sentiment improve.
UTStarcom (NASDAQ:UTSI) and Noah Education (NYSE:NED) advanced from below the trading range to way above it in just two weeks. Such an advance is highly unusual and makes us to caution investors.
Petrochina Co. Ltd. (NYSE:PTR) and Huaneng Power Intl. (NYSE:HNP) are the first two Chinese stocks on the overbought monitor with sound trading characteristics. These two are large cap, liquid China plays that are investment grade.
Aluminum Corp. of China (NYSE:SCH) and China Telecom (NYSE:CHA) are also stocks of interest among the 25 most overbought China plays. ACH and CHA are not overbought despite recent advance. See chart below for details.
51job Inc. (NASDAQ:JOBS), Sohu.com Inc. (NASDAQ:SOHU) and Youku Tudou Inc. (NYSE:YOKU) have reached theoretical lows and are considered oversold. Sina Corp. (NASDAQ:SINA) fell hard albeit the stock is not considered oversold yet. That price level is at $55.1 vs. current price of $56.3.
Here are the latest declines from Friday. Baidu Inc. (NASDAQ:BIDU) fell $8.10 or 5.14% on Friday but is just below the trading envelope on the chart above. BIDU is not considered oversold yet. Sina Corp. (NASDAQ:SINA), 51job Inc. (NASDAQ:JOBS), and Sohu.com Inc. (NASDAQ:SOHU) fell hard last Friday and are now oversold.
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.