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Stocks pushed higher into overbought territory on Friday, helping mean reversion traders exit their trades on strength.
In fact, two out of the three stocks in my last PowerRatings report, "3 PowerRatings Pullbacks for Short Term Traders," managed to close above their 5-day moving averages on Friday. These two stocks are Ardea Biosciences (RDEA | Quote | Chart | News | PowerRating), which gained more than 4% and Mercado Libre (MELI | Quote | Chart | News | PowerRating), which soared by more than 6% on Friday.
A third stock, RightNow Technologies (PRU | Quote | Chart | News | PowerRating) closed above its 5-day moving average on Friday, as did Whole Foods Markets Inc. (WFMI | Quote | Chart | News | PowerRating). LG Display (LPL | Quote | Chart | News | PowerRating) closed above its 5-day moving average on Thursday, and followed through to the upside on Friday.
Read more about PowerRating performance in our recent special: PowerRatings Does It Again – Results for 2008..
That leaves only MGIC Investment Corporation (MTG | Quote | Chart | News | PowerRating), which has closed lower for four out of the past five trading days and has been drifting closer to its 200-day moving average. Like RNOW, MTG has a PowerRating of 8.
To RNOW and MTG, I will add another three stocks to round out our 5 PowerRating Stocks for the Next 5 Days. All five stocks in today’s report will have PowerRatings of 8. Recall that our testing reveals 8-rated stocks to have outperformed the average stock by a margin of more than 6 to 1 after five days.
Unilever (UN | Quote | Chart | News | PowerRating). PowerRating of 8. Unilever has traded sideways over the past few days, closing lower and earning a lower and lower 2-period RSI. Additional selling to bring the stock’s RSI into the single digits will be among the first signs of potential opportunity to the long side in this stock.
Ritchie Brothers Auctioneers (RBA | Quote | Chart | News | PowerRating) PowerRating of 8. RBA has sold off aggressively in the past few days, helping drive the stock’s 2-period RSI down below 6. RBA had been trending higher before the pair of sharp selling days and it was the severity of the selling – which included a gap down on Thursday – that has helped create oversold conditions in the stock.
Hansen Natural Corporation (HANS | Quote | Chart | News | PowerRating). PowerRating of 8. Sellers have been very aggressive with shares of HANS, selling the stock not just for the past three days, but for 10 out of the past 12. As such, the stock has earned not just a PowerRating of 8 but a 2-period RSI of 5 as of the Friday close.
Does your stock trading need a tune-up? 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! |
Whether you have a trading strategy of your own that could use a boost or are looking for a way to tell the stocks that will move higher in the short term from the stocks that are more likely to disappoint, our Short Term PowerRatings are based on more than a decade of quantified, backtested simulated stock trades involving millions of stocks between 1995 and 2007. Click the link above or call us at 888-484-8220, extension 1, and start your free trial today.
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