Autozone, VF Corp, Motorola Retreat Toward Short-Term Lows
With the market rebounding after a short, sharp, midweek sell-off, there are a few stocks that the sellers have not been able to quit. And while not all of the stocks in today’s column are in oversold territory yet, continued selling in stocks like these over the next few days is likely to produce the kind of short-term lows and oversold conditions that traders and active investors have been waiting for.
Two-day pullbacks in stocks like Autozone (NYSE: AZO) and VF Corp (NYSE: VFC), for example, have taken neither stock significantly lower yet. That said, new lows in either stock will mean a return trip to significant, short-term lows – levels that have served as tradable opportunities in both stocks as recently as late November.
Recall that after pulling back to 10-day lows at the beginning of Thanksgiving week, shares of VF Corp were higher by nearly 8% in just 7 trading days, as the stock climbed to 10-day closing highs. Shares of AZO, trading in much the same pattern, gained more than 3% over that stretch.
Another stock that has pulled back for two days in a row but not yet become oversold is Motorola Solutions (NYSE: MSI). MSI has been trading consistently in bull market territory since mid-October and, like AZO and VFC, rallied successfully from short-term closing lows in late November (up nearly 7% in five days).
Note that as of Thursday’s close, both Autozone and VF Corp have “neutral” ratings of 6 out of 10.
Other stocks pulling back to new short-term lows in bull market territory include Xyratex Ltd. (NASDAQ: XRTX), which sold-off by more than 5% on Thursday, closing at its lowest level in a month. The stock has a rating of 7 out of 10, which puts it at the high end of the “neutral” category, and finished technically oversold on Thursday. The last time XRTX closed at a new 10-day low in November, it spent more than a week churning but eventually rallied to a new, 10-day closing high and a gain of more than 3%.
And with “consider buying” ratings of 8, shares of American Railroad Industries (NASDAQ: ARII) are another stock in short-term correction mode that is likely attract buyers over the next few days. ARII has closed lower for three days in a row and is technically oversold ahead of trading on Friday.
The stocks in today’s report were drawn from the data and research available through PowerRatings. To find out more, click here.
David Penn is Editor in Chief of TradingMarkets.com