PowerRatings, Profit-Taking and Selling into the Bounce
The oversold rally that had been long in coming finally arrived on Tuesday as the Dow industrials, S&P 500 and Nasdaq all soared higher by more than 5%, 6% and 7%, respectively.
As you might imagine, this means that many of the stocks we had been suggesting short term stock traders keep their eyes on have advanced. Both Career Education Corporation
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PowerRating) and Corinthian Colleges
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PowerRating) were up big on Tuesday, gaining 4% and 5%. And Palm Inc.
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PowerRating) was up nearly 15% on the day. Short term traders who incorporated these high Short Term PowerRatings stocks into their trading strategies should begin thinking about taking at least partial profits in these trades.
Of the two other stocks in the most recent 5 PowerRatings Stocks for the Next 5 Days column, Green Mountain Coffee Roasters
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PowerRating) advanced modestly, but is not yet so oversold that short term traders in the position should be overly wary. Note all the same that GMCR’s Short Term PowerRating has declined from 8 to 6 and the stock may not be the best place for new capital at this time.
Lastly was Lance Inc.
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PowerRating). This stock has closed lower for five days in a row about the 200-day moving average. We have found in our research into short term stock price behavior that stocks that were trading above their 200-day moving averages and had closed lower for five or more consecutive sessions actually produced positive returns in one-day, two-day and one-week timeframes. As such, of the 5 stocks recently highlighted, Lance Inc. is the one that interested short term traders should continue to consider. LNCE, as of the Tuesday close, has a Short Term PowerRating of 8.
Recall that stocks with Short Term PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1 after five days. This is based on our analysis of millions of simulated short term stock trades since 1995.
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.
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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.