PowerRatings Apres Le Sell-Off: OTEX, WNR, MYGN

  • February 22, 2009
  • David Penn

Despite a late rally that helped boost stocks off their lowest levels on Friday, the selling the ended the week was enough to keep stocks down.  This means that the high Short Term PowerRatings stocks that we began tracking on Friday will continue to be among those potentially representing superior opportunities this week.

As difficult as it may be to hear it, the fact that the markets remain so deeply oversold is reason to anticipate a bounce.  For those playing the broader markets, the S&P 500, the Nasdaq and so on, this bounce may or may not be a tradable event.  The Short Term PowerRating for the SPY, for example, is 7, which suggests a market that is close to becoming a “consider buying” market in the short temr, but not there yet.

But as the Short Term PowerRating in the S&P 500 begins to increase, short term traders should know that their trading strategy will need to adapt to the growing opportunities to the long side.  Sooner or later, those who have sold short stocks will need to take profits, covering shorts and sending stocks higher — sharply higher in some instances.  And those who have been waiting for an opportunity to buy will see in the recent decline in prices both value and opportunity.

Our stock trading strategy as Short Term PowerRatings traders falls into the latter category.  While a falling market will drive down most stocks, some of those stocks will be driven down while still trading above their 200-day moving averages.  And these are the stocks which, statistically, are most likely to outperform the average stock in the short term “sweet spot” of 5 to 8 days.

Going into this week’s training, we will be focused on those beaten down stocks that have not yet crossed the “line in the sand” at the 200-day moving average.  Again, a number of these high Short Term PowerRatings stocks from my last column remain stocks to watch today.  These include:

Open Text Corporation
(
OTEX |
Quote |
Chart |
News |
PowerRating)  Short Term PowerRating 9.  RSI(2): 0.645

Western Refining Inc. 
(
WNR |
Quote |
Chart |
News |
PowerRating)  Short Term PowerRating 9.  RSI(2): 3.30

Myriad Genetics
(
MYGN |
Quote |
Chart |
News |
PowerRating)  Short Term PowerRating 9.  RSI(2): 3.83

Remember that our research into short term stock price behavior indicates that stocks with Short Term PowerRatings of 9 have outperformed the average stock by a margin of more than 13 to 1 after five days.

Does your stock trading need a tune-up? Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 after five days.

Click here to start your free, 7-day trial to our Short Term PowerRatings!

Whether you have a trading strategy of your own that could use a boost or are looking for a way to tell the stocks that will move higher in the short term from the stocks that are more likely to disappoint, our Short Term PowerRatings are based on more than a decade of quantified, backtested simulated stock trades involving millions of stocks between 1995 and 2007. Click the link above or call us at 888-484-8220, extension 1, and start your free trial today.