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Within a fortnight, the question in Asia has changed from whether to buy shares at all given sluggish market performance, to what stocks still look cheap. With this seismic shift underway in attitudes toward equity valuations, the week ahead may represent a unique opportunity for investors to restructure their portfolios ahead of the summer.

Since April 21, the Hang Seng has gained 6.1%, to a three-and-a-half month high of 26,241.02 at Friday's close. The Shanghai Composite Index has surged 18.5%, to 3693.11. Japan's Nikkei has risen 5.1%, to 14,049.26, as value buyers have dipped deep into financials and exporters.

But while buying has been supported by strong volumes and lower amounts of short-selling, most strategists and technicians foresee a selloff toward midmonth.

"This could be the mother of all sucker rallies," says Andrew Clarke, a trader at Societe Generale in Hong Kong. "We could be just about to see the emergence of the damage to the real economy when corporate results come out. China has problems with inflation, as does Hong Kong. Arguably, the U.S. has problems, too."

"The Hang Seng is due for a pull back below the 25,000-point mark. For the coming week a resistance point of 26,000 will remain in place, but support will be back at 25,000 by the month end, when reporting season is under way," says Martin Marnick, a director at Helmsman Global Trading in Hong Kong.

Support for the theory that key indices are ready to give up some of last month's gains are especially manifest in the weakening performance of large market weightings such as

China Mobile

(CHL) - Get China Mobile Ltd. Report


China Life Insurance

(LFC) - Get China Life Insurance Co. Ltd. Report

. While these shares are still rising, they are no longer doing so at the same pace as they were when the buying was just starting.

After rising 14.5% throughout most of April, China Mobile has remained fairly flat since then, closing at HK$136.10 on Friday. In the past week, the company reported it was giving out 100,000 mobile handsets in order to attract customers to its struggling 3G service. Revenue from 3G-enabled data services is a crucial source of earnings growth going forward for all mobile providers.

Equally, while China Life Insurance shot up around 22%, buying remained bullish but steadier in the past week, as the stock gained 5.7%, to HK$35.15 -- the bulk of which was on Friday, as Hong Kong markets caught up with the U.S. May Day rally after a public holiday Thursday. While China Life and rival

Ping An


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have soared on news that banks on the mainland will be able to invest in them, time has taught that they are some of the first to fall in the event of a downturn in the market, particularly if inflationary concerns play a part in investors' fears.

It's not just in Hong Kong that investors are showing less appetite for Chinese consumption-related stocks, either. While

(BIDU) - Get Baidu Inc. Report

has risen 75% recently, the stock made a leap for $373.81 this week, but fell back by Friday to $362, barely above its open Monday.

That's not to say there is nothing that represents a buying opportunity in the Chinese tech sector, however.

( ALBCF) has long underperformed peers such as Baidu and

(SOHU) - Get Ltd. Report

since its debut in Hong Kong in November. In March, the company, in which



owns close to a 40% stake, plunged below its IPO price of HK$13.50.

Despite gains of 13.3% this week, the shares have only risen to HK$16.20. Alibaba could benefit further, however, because it looks increasingly likely that


(MSFT) - Get Microsoft Corporation Report

will raise its offer for Yahoo!.

Property stocks such as

Hang Lung Properties


, the world's largest listed real estate developer by market cap, and

Cheung Kong


, have also fared well. On Friday, Hang Lung leapt 6.5%, to HK$33.75, after a 25 basis point interest rate cut in the U.S. this week. Stocks that have gained as a result of excitement over U.S. interest rate cuts may not do so for much longer, some point out.

"With limited room for Hong Kong banks to follow a rate cut in the U.S., Hong Kong property companies may not react as positively as in the past. Resource stocks could also see a limited upside, but the strong rally in U.S. financials should lend support to banks," says Steven Wong, a trader at Daiwa Securities SMB in Hong Kong.

Most pertinent perhaps is the issue of whether recent policy action in Beijing continues to stabilize stock prices there. (In April, Beijing officials reduced stamp duty on share purchases to 0.1%, from 0.3% previously, and reduced the number of shares which can be sold after an IPO's "lock-up" period expires, by mandating sales be made in large blocks). Market strategists are not hopeful that it will.

"We expect support will be temporary as this policy move triggers fears by current lock-up shareholders that further policies could restrict their selling. Shareholders are sitting on so much profit and would hasten to realize these profits," writes Lan Xue, a Chinese market strategist for Citigroup in Hong Kong in a research note.

Xue adds that the Shanghai Composite Index is likely to remain trading in a band between 3,000 and 4,000 points, unchanged from Citigroup's forecasts prior to the recent rally.

The main aspect driving a revaluation in securities' prices is likely to be inflation -- so far a pretty overlooked factor in valuations and earnings, according to Helmsman's Marnick.

"Inflation is a global dynamic that is here to stay, and the Fed may be misreading the tea leaves," says Marnick. "God forbid that some of the pump-priming actually works and the Fed is forced to U-Turn on policy and lift rates during the fourth quarter. If the Fed has over-baked the cake, then this will create whiplash in treasury and equity markets, and the value of the dollar."

If inflationary fears play a part in the next destabilization of equity markets, this may be good news for beaten-down gold miners. While stocks in Hong Kong have rocketed, miners

Zijin Mining



Zhaojin Mining


, and

Sino Gold

( SIOGF) have all dramatically underperformed.

In some cases, the gold miners are trading in negative territory even as stocks in other commodity-related sectors, such as


(CEO) - Get CNOOC Ltd. Report

, are bearing out strong gains.

With Asian markets bullish but still volatile, the first full week of May could be the moment to begin a round of "Spring cleaning," clearing excess momentum from the decks and creating a balanced portfolio in the event of a further upturn, or another dip.

Be sure to check out the Far East Portfolio at to find out which Indian and Chinese companies are making big moves and announcing major news.

Daniel M. Harrison is a business journalist specialising in European and emerging markets, in particular Asia. He has an MBA from BI, Norway and a blog at

. He lives in New York.