Thursday evening, subscribers to our free, subscription-only, dailiy e-mail newsletter, 7 Stocks You Need to Know, read this in an edition titled: “Seagate Tech, Lions Gate and More!”
4. Lions Gate Entertainment (LGF | PowerRating)
Last % Change: (1.41%) Edge: +0.5% RSI(2): 10.51
Days Down: 2 in a row New Lows: 5-day: yes 2-week: yes
Notes: Trading in a narrowing range since late February, Lions Gate Entertainment has begun to move toward the lower end of the consolidation, finishing in the red for a second consecutive session on Thursday. Any additional selling on Friday almost certainly will return LGF to technically oversold levels.
On Friday, Lions Gate Entertainment (NYSE: LGF) traded lower, closing in oversold territory and signalling to short-term traders and active investors that the stock had retreated to levels where, historically and statistically speaking, traders have been more inclined to buy than sell.
Monday morning, shares of LGF gapped higher by nearly 3%. By the end of the day, Lion’s Gate Entertainment had gained more than seven and a half percent. LGF gained another 4% on Tuesday and , in the first few minutes of trading Wednesday morning, shares of Lion’s Gate are already up another 4%.
Not every stock we highlight in 7 Stocks You Need to Know will make the kind of big moves that Lion’s Gate has made over the past few days. But what our research into short-term stock price behavior shows and has shown for decades, is that stocks in uptrends that pull back into oversold territory tend to make significant short-term gains. What 7 Stocks You Need to Know does is help train short-term traders and active investors to recognize these potential opportunities every single day.
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David Penn is Editor in Chief of TradingMarkets.com