Bull Market Failures: 3 Stock Calls Ready to Fall
The last several days have taught traders an important lesson. Even in the most raging bull markets there will be times of bearishness. The stock market never goes straight up, but rather moves in a series of up moves, then drops back, then moves up again. It is a bull market when the up moves outweigh the down moves and a bear market when the opposite occurs over time.
Today, stock futures are selling off in anticipation of potentially negative economic releases and simple carry over of selling momentum from yesterday. It’s a tough call on what will happen by the close today. Be ready for anything, many opportunities will present themselves for nimble short term traders.
Just as the entire market moves in a series of ebbs and flows, individual stocks exhibit the same characteristics. Some market practitioners actually compare this movement to fractals wherein the entire market can be broken into smaller and smaller timeframes or individual components with similar motion.
Regardless of the theory, in practice, all that matters is the short-term trader’s ability to locate stocks that are overbought and ready to fall. These stocks can be shorted for downside profits or the same methodology can be applied to your portfolio to take profits from your long holdings. Our Stock PowerRatings are a simple tool to locate these stocks that are temporally ready to pullback over the short-term.
The Stock PowerRatings are based on extensive, statistically valid studies going back to 1995. We have discovered that stocks earning the lowest ratings of 1 or 2 that have experienced a recent run up are likely candidates for a pullback over the next 5 days.
Here are 3 stocks that look ready to fall:
Abraxis Bio Science Â
(
ABII |
Quote |
Chart |
News |
PowerRating)
Garmin Ltd
(
GRMN |
Quote |
Chart |
News |
PowerRating)
Sina Corp
(
SINA |
Quote |
Chart |
News |
PowerRating)
Learn more strategies for trading stocks in the short term with a free trial to our PowerRatings! The highest rated stocks have outperformed the average stock by a margin of more than 14 to 1 after five days! Click here to launch your free PowerRatings trial today!
David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.