Swing Trading with PowerRatings: Model Trade of the Week in Global Crossing
Our Swing Trading with PowerRatings Model Trade of the Week is ^GLBC^.
Global Crossing earned a PowerRatings upgrade to 8 on July 12, after pulling back by more than 1% and closing lower for two days in a row. Closing lower again on the following day, helped the stock maintain its 8-rating.
As I wrote in last week’s Swing Trading with PowerRatings Model Trade of the Week, PowerRatings upgrades to 8 can serve as an alert for swing traders, especially swing traders using a conservative approach. Stocks that earn PowerRatings upgrades to 8 today are often the stocks that earn PowerRatings upgrades to 9 or even 10 tomorrow.
In the case of Global Crossing Ltd., the stock’s upgrade to 9 came after two days spent with a PowerRating of 8. This upgrade to 9 was for many swing traders the signal for a potential trading opportunity in GLBC should the stock continue lower.
Earning PowerRatings of 9 on July 14, shares of GLBC pulled back again on the following day. Using a 3% intraday weakness level, swing traders would have been able to take a position in GLBC at 35.40 on the 15th.
Note that GLBC earned PowerRatings of 9 on the 15th, continuing to reflect the fact that the stock was trading at levels from which it historically had made gains.
Note also that the 15th turned out to be a short term low in the stock.
In just two days, shares of GLBC was on its way back up, rallying into strength above its 5-day moving average and gaining more than 5%.
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David Penn is Editor in Chief of TradingMarkets.com