5 PowerRatings Stocks Under $15
Stocks are off to a strong start Thursday morning, as oversold conditions encourage traders to bid shares higher in the first hour of trading.
Encore Capital Group Inc.
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PowerRating) Short Term PowerRating 10. RSI(2): 0.341
The S&P 500 has been down for six days in a row going into this morning’s trading. The same can be said of the Dow industrials. As I noted a few days ago, we have done research on markets that make multiple consecutive down days and learned that the longer these consecutive down-streaks continue, the more likely those markets are to reverse.
NPS Pharmaceuticals Inc.
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PowerRating) Short Term PowerRating 10. RSI(2): 0.860
This effect has been most pronounced in markets that are trading above their 200-day moving averages — so much so that when we published this tendency as one of our TradingMarkets Stock Market Indicators, we added the qualification that the market in question trade above its 200-day moving average.
Telecommunication Systems Inc.
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PowerRating) Short Term PowerRating 10. RSI(2): 1.70
Nevertheless, we can still apply this information to our current situation in the major market indexes. If we know that the lower the markets go, the more likely we will see a strong counter-reaction, then we not only can determine the best time to bet against stocks (i.e., when they are overbought as opposed to oversold). But also we can gauge when those bets may have likely run their course. In other words, it is a way to keep from becoming too bearish when markets are actually already at their worst.
La-Z-Boy Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 0.173
What does this mean for swing traders today? Traders who have been buying as the markets moved lower should begin looking for exit opportunities insofar as our deeply oversold market is likely to rally — both strongly and suddenly — within the next few days. Traders should be wary of losing their discipline when this happens. That rally will not be a time for taking on new long positions; insofar as we remain below the 200-day moving average, it will remain a time for taking profits, considering short selling opportunities (for more aggressive traders) and waiting for the likely sell-off to produce another round of opportunities to the upside.
Finish Line Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 3.71
Of the five stocks in today’s report three have Short Term PowerRatings of 10 and two have Short Term PowerRatings of 9. We found after analyzing millions of simulated short term stock trades between 1995 and 2007 that stocks with Short Term PowerRatings of 9 outpeformed the average stock by a margin of more than 13 to 1 after five days.
Stocks with Short Term PowerRatings of 10 — our highest rating — actually outperformed the average stock by a margin of nearly 17 to 1 over the same time frame.
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.
David Penn is Editor in Chief at TradingMarkets.com.