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Stocks pulled back on Wednesday, as traders took profits from the strong rally of the previous day.
Essentially, the markets have been trading in a range since mid-month, when the markets sold off in the wake of a push toward the 200-day moving average (in the S&P 500 and Dow industrials) that bought the markets to their most overbought levels in more than a month. While the Nasdaq has climbed above its 200-day, it too has been mostly range-bound.
Nevertheless, Wednesday’s sell-off helped bring a few more stocks into oversold territory above the 200-day, and among these are a number of high PowerRatings stocks that short term traders looking for short term pullbacks should keep an eye on over the next few days.
Read more about PowerRating performance in our recent special: PowerRatings Does It Again – Results for 2008.
All 5 stocks in today’s report have PowerRatings of 8 or 9. Our rating system rates stocks on a scale of 1 to 10, with the highest rated stocks having outperformed the average stock by a margin of more than 14 to 1 after five days. This is based on our testing of thousands of simulated stock trades since 1995, including 2008.
Prudential Financial [PRU | Quote | Chart | News | PowerRating] PowerRating of 9. Selling off for three out of the past five days, shares of PRU were down more than 2% on Wednesday. The stock only recently (early May) climbed above its 200-day moving average.
Whole Foods Markets [WFMI | Quote | Chart | News | PowerRating] PowerRating of 8. The stock has closed lower for three out of the past four days and has a 2-period RSI of less than 11. WFMI has been trading above its 200-day moving average since mid-March.
LG Display Company [LPL | Quote | Chart | News | PowerRating]. PowerRating of 8. Shares of LPL have broken down from a largely sideways consolidation above the 200-day moving average. This move lower has brought the 2-period RSI down to less than 8.
MGIC Investments [MGIC | Quote | Chart | News | PowerRating] PowerRating of 8. Also consolidating shortly after rallying above its 200-day moving average were shares of MGIC Investments [MTG | Quote | Chart | News | PowerRating], which were down another 5% on Tuesday.
Mercadolibre [MELI | Quote | Chart | News | PowerRating] PowerRating of 8. Shares of MELI slid by nearly 9% on Wednesday, helping make the stock the most oversold in today’s report with a 2-period RSI of less than 3.
Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of more than 14 to 1 after five days. Click here to start your free, 7-day trial to our Short Term PowerRatings!Want updates on our latest articles? Have something to say to David Penn or the staff at TradingMarkets? Follow David on Twitter at @Penn_TM and TradingMarkets at @Trading_Markets.
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