5 PowerRatings Stocks for the Next 5 Days: FDO, CERN, SZK, SIJ, EW
The rally continued on Thursday, pushing a growing number of stocks into overbought territory both above and below the 200-day moving average.
There are a number of ways for short term traders to look at the market’s advance in the near-term.
1. Many stocks are overbought. In fact, the number of stocks that are pulling back and earning PowerRatings upgrades to 8, 9 or 10 is relatively small. This means that the number of opportunities to buy oversold, high Short Term PowerRatings stocks are especially few right now.
2. Exchange-traded funds in general are overbought, as well. Many of these are developing lower and lower PowerRatings as their 2-period RSIs climb. Those ETFs trading below their 200-day moving averages will likely be targets for short sales as they become increasingly overbought.
3. Short or inverse ETFs are especially interesting now. While there are many that have pulled back dramatically, and are now trading near their 200-day moving averages, it is also true that a number of short ETFs have plunged below their 200-day moving averages. In fact, short ETFs like the ProShares UltraShort Technology ETF
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PowerRating), ProShares UltraShort Financials ETF
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PowerRating) and the ProShares UltraShort Oil & Gas ETF
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PowerRating) are more likely to become overbought below the 200-day moving average than they are likely to become oversold above that level in the near term.
So what does this mean in terms of strategy for the short term trader? As we noted in our recent article on PowerRatings performance, PowerRatings Does It Again – Results for 2008, high PowerRating stocks continue to outperform the average stock regardless of whether the broader market is a bull market or a bear market.
The choice here is between trading high PowerRating stocks and high PowerRatings inverse ETFs. Traders with a little more bullish bias toward the markets in general may be more inclined toward the former. But included among today’s five potential opportunities are both stocks and short ETFs that are ready for reversal.
Family Dollar Stores
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PowerRating) Short Term PowerRatings 8. RSI(2): 7.55
Cerner Corporation
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PowerRating) Short Term PowerRating 8. RSI(2): 34.46
ProShares UltraShort Consumer Goods ETF
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PowerRating) Short Term PowerRating 7. RSI(2): 13.72
ProShares UltraShort Industrials ETF
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PowerRating) Short Term PowerRating 7. RSI(2): 9.52
Edwards Life Sciences
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PowerRating) Short Term PowerRating 7. RSI(2): 5.14
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!