The overreaction hypothesis and the information hypothesis are two major hypotheses regarding the effects of price constrains on stock price behavior. This paper examines the price behavior of limit moves for stocks listed on the Shanghai Stock Exchange over the period 1997 —2001. The results indicate the price continuations for the overnight period following limit moves and the price reversals for the subsequent trading time period. These results show that the noise traders on Shanghai stock market overreact to new information. On the other hand , the price constrains on Shanghai Stock Exchange restrict the overreaction.