Stock of the Week: Buying the Selling in Threshold Pharmaceuticals
The choice of this week’s Stock of the Week came down to two of the better performing, top-rated stocks from my PowerRatings Model Portfolio. But at the end of the day, the gain of more than 25% in shares of Threshold Pharmaceuticals (NASDAQ: THLD) was too much to resist talking about.
Threshold Pharmaceuticals came to my attention as a top-rated stock (a “consider buying” 9 out of 10) on the final day of February. Despite earning a major ratings upgrade to our highest rating of 10 out of 10 the very next day, shares of THLD did not pull back by much more than 1% . This meant that most traders looking to buy THLD on an intraday basis were left waiting for another opportunity.
Fortunately, they did not need to wait very long. The day after earning a top 10 rating, shares of THLD pulled back by as much as seven and a half percent on an intraday basis. This meant that traders using aggressive intraday entries of 2-3% below the previous close, as well as conservative traders using broader intraday entries of 6-7% were all able to take a position in THLD as it pulled back on an intraday basis to truly extreme oversold levels.
The stock continued lower over the next few days, continuing to earn “consider buying” 10 out of 10 ratings for another two trading sessions before buyers were finally coaxed off the sidelines and into the market. Shares of THLD bounced modestly on March 7th, but soared by more than 25% on Tuesday alone. Those short-term traders and active investors who took positions in Threshold Pharmaceuticals at some of its extremely oversold levels in the days before, the rewards were significant.
The stock continued higher on Friday, providing positive slippage for those active investors who were unable to exit their positions on Thursday’s close.
Earning honorable mention among this week’s best performing stocks from the PowerRatings Model Portfolio is LCA-Vision (NASDAQ: LCAV). Traders were able to scale into LCAV in the middle of the week as the stock pulled back for what turned out to be a six-day selling streak. Up more than 12% on Friday alone, LCAV earned top ratings of 10 out of 10 for four consecutive sessions during its sell-off last week.
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David Penn is Editor in Chief of TradingMarkets.com