DRAD Is a Low-Priced Stock With Big Potential
PowerRatings are based on the relative strength or weakness of particular stocks or ETFs. The higher the rating, the greater the one week historical gain has been for stocks and ETFs with that rating. For best results, enter these trades with a limit order 3-7% below the previous day’s closing price. Higher % limit entries have historically shown a greater percentage of winning trades but higher % limit orders also reduce the chance of trade execution.
In the past, buying stocks with a rating of 10 on a 3% pullback the next day and selling five days later has been profitable 75% of the time. The average winner has gained 5.9%. Other entries and exits also show high winning percentages and large average gains.
Trading low-priced stocks with PowerRatings could be appealing to many traders. Low-priced stocks can make large moves on a percentage basis. Yesterday, Digirad Corporation (NASDAQ: DRAD) traded between $3.60 and $4.43, a trading range that was equal to 22% of the closing price. With large intraday ranges, traders could capture large profits in a short amount of time.
DRAD ended the day oversold with a PowerRatings of 10. It could be considered a buy below $3.65, a price 3% below yesterday’s close.
Using a limit order 7% below the closing price (at $3.50 for DRAD) has historically delivered larger profits, on average, than smaller % limit entries. In the past, buying stocks with a rating of 10 on a 7% pullback the next day and selling five days later has been profitable 78% of the time. The average winner has gained 10%.
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All data is as of the end of day on 11/25/2013.