5 Chinese Stock Trades With Breakout Potential

BALTIMORE ( Stockpickr) -- While most investors have had their sights set on the rally in U.S. stocks during 2012, Chinese names have been quietly staging a rally of their own this year -- and a more substantial one at that.

Although U.S. stocks have shoved their way to 8.6% gains so far in 2012, Chinese stocks have done nearly double that, rallying more than 15% year-to-date as better-than-expected economic numbers and aggressive central bank easing added liquidity to the Chinese equity market. As stock bargains start to look few and far between here at home, the People's Republic is beginning to look like a good alternative to park dollars in this year.

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Part of the reason for that is the shellacking that U.S.-listed Chinese stocks took back in the latter half of 2011. Now, even with significant ground still to make up before Chinese equities test their April highs, there are some attractive technical setups forming in some of the most popular Chinese names that trade here in the U.S. This week, we'll take a look at how to trade them.

For the unfamiliar, technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.

Here's a look at a handful of Chinese technical setups that could deliver breakout gains to your portfolio this week.

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