4 Top Tech Stocks for Traders: QLGC, INFA, WFR, WDC

March 11, 2008
David Penn

Today’s look at the world of
technology stocks brings us four stocks with the sort of high Short Term PowerRatings that suggest outperformance relative to the average stock over the next five days.

There may be few more frustrating feelings for a short-term trader than to spot a stock–or to have one appear as a result of a stock scan–only to have that stock ultimately disappoint by either not moving, not moving enough or, worse, moving in the wrong direction.

While our Short Term PowerRatings provide no guarantee that any specific stock will provide traders with any specific performance, our Short Term PowerRatings are backed by the sort of quantified historical back-testing that should make any trader confident that there is indeed an edge for traders who incorporate our PowerRatings into their trading.

Let’s take a quick look at how that is so. The highest Short Term PowerRatings stocks, the stocks with Short Term PowerRatings of 9 or 10, have outperformed the average stock after five days of more than 13 to 1. Stocks with average Short Term PowerRatings stocks were, as you might imagine, average performers. A stock, for example, with a mid-range Short Term PowerRating of 5 or 6 is expected, based on our research, to outperform the average stock by between 1.3 and 1.6 to 1.

So there is a lot to be gained by trading stocks with higher PowerRatings. Imagine a stock screen that produced a list of stock candidates for trading. Maybe the stock screen results came from a technical scan of breakouts or a fundamental screen based on earnings growth. What would you give for the ability to take that list of stock candidates and cross-reference them for their Short Term PowerRatings to see which stocks are most likely to be higher over the next few days?

One of the many trading methods we encourage traders to adopt is the use of multiple strategies. Multiple strategies are at the core of our trading and, by adding our Short Term PowerRatings to your trading practice, you can instantly gain the perspective of a whole additional set of indicators to help narrow down your list of potential trades to the ones most likely to result in profits.

While on the subject, it should not go without saying that TradingMarkets has published a special free report on the “5 Secrets to Short Term Stock Trading Success” which is an excellent guide to both short-term stock trading and to using our Short Term PowerRatings. Click here
to request your copy of this free report and see how combining time-tested principles of short-term stock trading and the latest quantitative research into what makes stocks move can help you become a better trader.

Because of their perennial popularity,
technology stocks are often a great place for short-term traders to start. The volatility and liquidity of many of these names means that even some of the lower-priced (in dollar terms) and relatively less known stocks can still make for excellent trading opportunities–at least when their PowerRatings are as lofty as the four top tech stocks in today’s discussion.

All of the stocks below have Short Term PowerRatings of 8. Based on our research into short-term stock behavior, this means all four stocks belong to that class of stocks that has historically outperformed the average stock by more than 8 to 1.

QLogic
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