Chinese stocks can't go up forever, right? Sooner or later, the nation's red-hot stocks will bump against a ceiling, realize what they've done, and correct accordingly, right?

It will happen. It's just not happening now. I have spent the pastfourweeks writing about the trend of Chinese stocks that keep dominating the weekly lists of the market's biggest winners.

Did the streak come to an end last week? Not even close. Check out the two largest percentage gains on the New York Stock Exchange over the past trading week.

Last Week's Gain

China Digital TV (NYSE:STV)


Qiao Xing Mobile (NYSE:QXM)


If China Digital TV rings a bell, it's because China's leading provider of conditional access systems in the digital television market went public at $16 a pop two weeks ago. It seemed as if the first wave of aftermarket investors were going to get stung when the IPO opened at $35 before closing at $28. Five trading days later, the shares have raced all the way up to $49.13.

If Qiao Xing sounds familiar, it's because the stock appeared in my second installment two weeks ago, when the stock lit up the market with a 34% weekly gain.

And don't go thinking that the VIP party was only going on at the Big Board. The biggest Nasdaq mover was Hong Kong's City Telecom (NASDAQ:CTEL), up 74% over the course of the past five trading days.

Sure, China's scorching solar energy stocks took another hit when LDK Solar (NYSE:LDK) surrendered 16% of its value during the week. It's never just a matter of shooting fish in a barrel, even when the surge is regional.

However, I would argue that U.S. traders are still not overly smitten with Chinese equities. All one has to do is take a look at the list of closed-end funds that specialize in overseas equities. There are several funds that buy only Chinese stocks. They are all trading at a discount to their net asset value.

Greater China (NYSE:GCH) and Morgan Stanley China Shares Fund (NYSE:CAF) trade at 20% and 21% discounts to the value of their investments, respectively. There are no stateside-traded world equity funds trading at deeper markdowns to what they would be worth in liquidation.

It's not as if the two funds are slackers, either. Greater China has more than doubled over the past year. Morgan Stanley's fund -- which snaps up A-shares listed on the Shanghai and Shenzhen exchanges -- is actually sporting a 231% gain over the past year.

In short, there's a sobering reality to the frothy hype. You can still get your buck's worth of Chinese stocks for $0.80 through these funds. That's not typically the sign of a top. Too many investors fear that a fall is coming. That pessimism is baked in. So excuse me if I suggest that accusations of overdone optimism are ringing hollow.

You'll find more than a few market-thumping Chinese stocks recommended in the Global Gains newsletter. Other Fool growth-stock newsletter services, like Motley Fool Hidden GemsRule Breakers, and Stock Advisor, have several picks that are based out of China.

Corrections will come. We had a sharp one in China this past winter. The step back then was only practice for the several steps forward that have been taken since.

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