BUZZ-European stocks: the bounce candidates in an oversold market

** European markets in oversold territory on the charts, with brokers suggesting picking up quality names that have fallen with the market on China fears

** Weak Chinese PMI showing manufacturing at a 6.5 yr low further dents sentiment

** Stoxx 600, Dax and FTSE 100 now all in oversold territory on an RSI basis. Chart: http://link.reuters.com/wav45w

** Dax set for its worst month since August 2011 and at its most oversold level since Oct (HKSE: 3366-OL.HK - news) 2014

** Brokerage Aviate Global reverses its short call on the Dax and German carmakers, pointing to indicators that suggest a bounce in some names

** BMW (Swiss: BMW.SW - news) 's RSI at levels last seen shortly before a 65 pct rally begun in Oct. Chart: http://link.reuters.com/zav45w

** Blue (OTC BB: BUES - news) -chip names in most oversold list on the Dax include Henkel (Other OTC: HELKF - news) and BASF, with Bayer also near oversold levels. Chart: http://link.reuters.com/bev45w

** On the FTSE, most oversold names led by China proxies (Standard Chartered (HKSE: 2888.HK - news) , Aberdeen, HSBC and Glencore (Xetra: A1JAGV - news) all feature) but also feature traditionally defensive blue-chip consumer staples stocks

** RSIs for Unilever (NYSE: UL - news) and SABMiller (Xetra: BRW1.DE - news) both under 30, with Diageo (LSE: DGE.L - news) also borderline

** Citi's proprietary overbought/oversold indicator triggered a buy signal on Friday with historical data suggesting a 90+ pct chance that the index sees a 5+ pct move higher over the next 20 days, Chemicals and Oil and Gas cited as likely beneficiaries (RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)