Why We Buy Weakness
Each day,
TradingMarkets publishes
7 Trading Ideas for Today, a selection of stocks from our daily indicators. TradingMarkets
Stock Indicators are based upon our latest quantitative research, and
highlight trading edges backed by our database of more than 7-million historical
simulated trades.
On Wednesday,
March 21,
SunPower Corporation
(
SPWR |
Quote |
Chart |
News |
PowerRating) was
the candidate from the
5+ Consecutive Down Days
list.
These are stocks that have closed down for five or
more consecutive days and are trading above their 200-day moving average. Our
research shows that stocks trading above their 200-day moving average that close
down for five or more days have shown positive returns, on average, 1-day,
2-days and 1-week later. Historically, these stocks have provided traders with a
significant edge. Historically, these stocks have provided traders with a
significant edge.
The
TradingMarkets mantra is to “buy weakness,” and that is exactly what you could
have done here. After dropping in price for 6 straight days, SPWR became a
prime TradingMarkets oversold candidate. The results speak for themselves.
1-day later, SPWR closed +0.7%
2-days later, SPWR closed +3.6%
5-days later, SPWR closed +9.8%
Obviously,
results like these do not occur every time, but
our quantified research clearly shows that the edges exist during extreme
oversold or overbought conditions.
Check out our
latest quantified research articles
here. If
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click here
for a free 7-day trial. Check back daily for more 7 Trading Ideas for Today,
and develop your own watchlist of stocks with historically-backed edges.
John Lee
Associate Editor