April 16, 2014 (Chinavestor) US listed Chinese stocks have traded in a narrow range on Tuesday. The market itself lacked direction. The NASDAQ fell 1.8% before a complete reversal which sent the index 11.47 points or .29% higher by the end of the trading day.
The China ADR Index, calculated by Chinavestor, fell 9.9 points or 1.4% due to a decline of large cap, index heavy weight energy stock. Internet, technology stocks were mixed with oversold Sohu.com Inc. (NASDAQ:SOHU) eking out some noticeable gains besides Baidu Inc. (NASDAQ:BIDU). China's largest search engine company advanced $1.71. All other Chinese stocks advanced less than a buck as the first part of the following chart testifies.
Chinese stocks on the move, Tuesday April 15, 2014
Large cap energy stock weighted down the China ADR Index on Tuesday. Sinopec (NYSE:SNP), China's largest oil refiner, fell $3.53 or 3.82% followed closely by CNOOC Ltd. (NYSE:CEO) and Petrochina Co. Ltd. (NYSE:PTR. Large cap China Life Insurance (NYSE:LFC) and China Mobile (NYSE:CHL), the largest mobile carrier in the world, followed suit. All these large stocks were among the ten worst Chinese stocks listed on US stock exchanges.
Ctrip.com International (NASDAQ:CTRP), a dominant Chinese online travel agent, fell $3.54 or 6.51%, the most among Chinese ADRs.
Taking a look at Chinese stocks from a distance, the picture is less blurry. The advance from Sohu.com Inc. (NASDAQ:SOHU) was a welcome news to longs because the stock was oversold last Friday. After two days of finding a bottom, SOHU is not extremely oversold. But such a dismal advance was nearly not enough to send the stock over to the overbought screen.
Huaneng Power Intl. (NYSE:HNP) is the stock with real trading volume on the overbought screen below. But HNP lacks momentum and is only up on the list thanks to previous advanced. Huaneng Power (NYSE:HNP) is not overbought by any stretch of imagination.
Aluminum Corp. of china (NYSE:ACH), the third largest aluminum maker in the world, is off an extreme overbought position from last Friday. The stock has declined $.56 or 5.48% since Friday and is trading close to the normal trading range.
Most of the momentum from last week is gone for CNOOC Ltd. (NYSE:CEO) and for China Unicom (NYSE:CHU) as well, according to the following chart.
Most overbought Chinese listings on Wednesday morning, April 16, 2014.
There are some oversold Chinese stocks on the following list. ChinaCache International (NASDAQ:CCIH) is the most oversold of all Chinese stocks this morning. The stock fell $12.75 in just three days and has reached theoretical lows. Upside potential exceeds downside risk at this point.
The problem with small stocks like China TechFaith (NASDAQ:CNTF) is that technical indicators like the oversold one, don't work well for such low market cap stocks.
The oversold China monitor picked up significant losses from a good number of stocks. Melco Crown Entertainment (NASDAQ:MPEL) is just one of them. It is important to point out that none of these listings have reached theoretical low prices and thus are not considered oversold. See list below for details.
Most oversold Chinese listings on Wednesday morning, April 16, 2014.
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.