5 PowerRatings Stocks for the Next 5 Days: USMO, TOWN, RGLD, NS, NCIT

  • February 5, 2009
  • David Penn

Despite the buying that helped push stocks higher late on Thursday, both the S&P 500 and Dow industrials remain below overbought levels.  By contrast, the Nasdaq, which dipped into overbought territory below the 200-day moving average on Tuesday, re-entered that territory on Thursday.

Before looking at the next round of opportunities in stocks — which are admittedly fewer than I would prefer — let’s take a quick review of the stocks I have been highlighting over the past several days.  Yesterday, for example, I mentioned a number of oversold stocks with high Short Term PowerRatings that had become extremely oversold. 

All three of those stocks — Sequenom Inc.
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PowerRating), Trico Bancshares
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PowerRating) were all higher on Thursday — though both SQNM and TCBK remain below their 200-day moving averages.  These latter two stocks also continue to have very low 2-period RSIs of under 11, which means that more upside in the near term from these two in particular should not come as a surprise.

So while we will continue to keep an eye on those stocks, it is also time to start looking at the next round of trading opportunities, opportunities that should be right around the corner of the market’s current rally. 

Right now, with stocks on balance moving higher and becoming increasingly overbought below the 200-day moving average, our task as short term traders is two-fold.  In the immediate term, we should be on the lookout for PowerRatings upgrades in some of the short/inverse ETFs that we have done so well with in the past.  I suspect that we are another day away from seeing the ranks of our Top 25 PowerRatings List fill up with high Short Term PowerRating short/inverse ETFs.

USA Mobility Inc. 
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Towne Bank 
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Royal Gold Inc. 
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PowerRating)   Short Term PowerRating 8.  RSI(2): 17.74

NuStar Energy LP 
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NCI Inc.
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PowerRating)  Short Term PowerRating 8.  RSI(2): 3.47

The other task is to begin looking at those stocks that have already been pulling back, those stocks that have high Short Term PowerRatings even as the market moves higher.  These are the stocks that are most likely to make their final, capitulatory moves lower when the market as a whole corrects.  And as the Short Term PowerRatings of these stocks moves higher and their 2-period RSIs move lower, opportunities in stocks like those listed above will become all the more attractive.

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