Use TradingMarkets Indicators to Trade Energy Stocks
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 Monday, June
4, Oil and gas exploration company W&T Offshore
(
WTI |
Quote |
Chart |
News |
PowerRating) was
a candidate from the our
5 Consecutive Up Days list.
These are stocks that have closed up for five or more consecutive days and are
trading below their 200-day moving average. Our research shows that stocks
trading below their 200-day moving average that close up for five or more days
have shown negative returns, on average, 1-week later. Historically, these
stocks have provided traders with a significant edge. To learn more about our
research into stocks that make five, or more, consecutive up days, and how to
use this information,
click here.
The
TradingMarkets mantra is to “buy weakness, sell strength,” and that is exactly
what you could have done here. On 5/2/07, WTI had made 5 consecutive higher
closes, which told us that the upward surge may be about to lose momentum. The first blue arrow was a
potential short entry into WTI. If the position was covered 5-days later
at the second blue arrow, you would have made a quick 4.5% on the trade.
1-day later, WTI was
+0.4%
2-days later, WTI was -0.7%
4-days later, WTI had declined -4.8%
This is an example of an edge
that took just 4 days to unfold.
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
you don’t already have a TradingMarkets subscription,
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.
Darren Wong
Associate Editor
Reminder: We are in no way recommending the purchase or short sale of
these stocks. This article is intended for education purposes only. Trading
should be based on your own understanding of market conditions, price patterns
and risk; our information is designed to contribute to your understanding.