5 PowerRatings Stocks for the Next 5 Days: VMI, TG, TECUA, RES, XCO
Looking for stocks that are likely to outperform the average stock over the next few days? Our 5 PowerRatings Stocks for the Next 5 Days is a great place to start.
Two of the five stocks in today’s report are stocks we noted last time: Tredegar
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PowerRating) and Tecumseh Products
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PowerRating). The only difference is a significant one. Presented yesterday as stock with Short Term PowerRatings of 8, both TG and TECUA are now sporting brand new Short Term PowerRatings of 9.
The other stocks in today’s report all have Short Term PowerRatings of 8. While not as impressive in the short term as stocks with 9 ratings (or ratings of 10, for that matter), stocks with PowerRatings of 8 are still much better stocks for trading compared to the average stock.
Why do we refer to these stocks as “stocks for the next five days”? Because the 5-8 day period is, according to our research, the sweet spot for short term trading. For the vast majority of short term trades, this 5-8 day timeframe tends to provide stocks with as much time to make whatever moves they are going to make. Some traders go so far as to use this 5-8 day period as a time stop; if the trade is not profitable after 5-8 days, then the trade is exited and the trader moves on.
We don’t go that far. But our research confirms that if you short term trade is going to be successful, it is likely going to be successful within 5-8 days.
One thing we have found with many of our recent trades is that buy focusing on buying pullbacks, and even then waiting for intraday weakness before taking a position, we are able to gain a significant piece of the stock’s move as it bounces. There have been a number of recent occasions when trades suggested before the open were filled intraday and exited on the close at a profit.
This is not an everyday occurrence–or even a frequent one. But it happens often enough-or with a day or two in between-that it supports the idea of buying stocks as low as possible, as close to the low for the pullback. After all, when a stock has pulled back as far as it is going to, there is no other direction for the stock to move–in the short term–other than up.
All five of the stocks in today’s report have Short Term PowerRatings of 8 or 9. Our research on short term stock price behavior indicates that stocks with Short Term PowerRatings of 8 tended to outperform the average stock by a margin of more than 8 to 1 after five days. Stocks with Short Term PowerRatings of 9 were even more impressive, besting the average stock by more than 13 to 1 over the same time period.
Note also the variety in the 2-period Relative Strength Index values accompanying each stock. We consider 2-period RSIs of less than 10 to be oversold, with 2-period RSIs of less than 2 being extremely oversold.
Valmont Industries
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PowerRating). Short Term PowerRating: 9. RSI(2): 19.91
Tredegar
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PowerRating). Short Term PowerRating: 9. RSI(2): 26.06
Tecumseh Products
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PowerRating). Short Term PowerRating: 9. RSI(2): 6.31
RCP
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PowerRating). Short Term PowerRating: 8. RSI(2): 4.66
Exco Resources
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PowerRating). Short Term PowerRating: 8. RSI(2): 40.66
There are five things that every successful short term stock trader knows about trading markets like these. We have published all five in a new, special report called “5 Secrets to Short Term Stock Trading Success” now available for free. Learn what key factors are involved in turning mediocre speculators into professional-grade, short-term stock traders–and how our Short Term PowerRatings can play a part. Click here for your free report–or call us today at 888-484-8220.
David Penn is Senior Editor at TradingMarkets.com.