The Good, the Bad and the Ugly: XIDE, DSCP, HCP, MEND, NC
The latest edition of the Good, the Bad and the Ugly features a stock that stayed attractive all day, one that went from good to bad, and three that remind us why we should avoid average stocks.
What are our Short Term PowerRatings for? Traders around the world use our Short Term PowerRatings in a number of ways. Many traders use them as a “final filter” after their stock trading method or system has created a number of candidates for potential trades. Traders using Short Term PowerRatings then go through their lists and see which of those candidates have Short Term PowerRatings of at least 8, but preferably 9 or 10. Those stocks become the stocks to trade.
Others use our Short Term PowerRatings more directly. With limit orders under the previous day’s close and an exit when stocks close beyond the 5-day moving average, many Short Term PowerRatings traders need little more than a price chart and access to our Top 25 PowerRatings Stocks listing, which is updated every day.
Our Short Term PowerRatings can also be used to bet against stocks. In these cases, rather than looking for high PowerRatings stocks, traders look for the lowest PowerRatings possible, preferably Short Term PowerRatings of 1 or 2. It is the stocks with Short Term PowerRatings of 1 or 2 that have dramatically underperformed the average stock after five days. For traders who sell stocks short, these are the stocks that are most overextended to the upside and most vulnerable to a move lower.
The Good, the Bad and the Ugly takes a look at how stocks looked moving toward the close on the previous day as a way of deciding whether or not these stocks will be attractive candidates–for buying or selling–today. The Good stocks are stocks that maintained their high Short Term PowerRatings–or had their PowerRatings increase on an intraday basis–going into the close. The Bad stocks are stocks that started the day with a high PowerRating, but had that PowerRating downgraded over the course of the day. And the Ugly stocks are those stocks that have earned serious downgrades to their PowerRatings–many of which weren’t all that great to begin with.
Exide Technologies
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The Bad? How about Datascope
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PowerRating)? This stock began the day with an average Short Term PowerRating of 7. Not great, but not terrible either. And even as an average rating, a 7 is as good as it gets.
Unless that 7-rated stock becomes a three over the course of the trading day, which is exactly what happened to Datascope Corporation on Monday.
Last, there were a trio of stocks that certainly qualify for the Ugly designation. These three stocks began the day with average Short Term PowerRatings–an given that all three stocks has PowerRatings of 5, “average” might be a bit charitable.
Unfortunately, all three stocks had serious PowerRating downgrades over the course of the trading day. HCP Inc.
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PowerRating) slipped from a 5 all the way to a 2. And worst of them all, Nacco Industries
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PowerRating) began Monday session with a barely average Short Term PowerRating of 4 and, by late in the trading day, had its PowerRating plunge to the lowest level possible, a 1.
Just for some perspective, the highest rated Short Term PowerRatings stocks, the stocks with PowerRatings of 10, have outperformed the average stock by nearly 17 to 1 in five days’ time. Stocks with a 1-PowerRating, the lowest possible score in our rating system, actually underperformed the average stock by nearly 5 to 1 after five days.
For traders looking to buy, XIDE looks to be among the opportunities from Monday that are likely to remain opportunities on Tuesday. And for traders looking to bet against stocks, there are at least another three stocks that are signaling that their upside is increasingly limited.
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.