3 Low Priced Stocks for Traders: PHTN, VLNC, IDMI
For both traders and investors, there is often an attraction to stocks that are low in dollar terms. While the money is just as green whether it comes from the trade of a $5 stock or a $50 stock, there is something in stocks under $10 that seems to always get traders excited.
Fortunately, this morning we have three stocks in our under-$10 category that also have the sort of high, Short Term PowerRatings that our research tells us are more likely than the average stock to be higher in five days’ time.
High Short Term PowerRatings enable traders to know in an instant whether or not a stock has a good likelihood of making short-term gains. Traders use Short Term PowerRatings both as a guide to picking stocks as well as a screen or filter for stocks that may have appeared on a Watch List or Stock Scanner. All a trader has to do is look and see if his or her candidates have Short Term PowerRatings of at least 8. The candidates that have Short Term PowerRatings of 8 or better are cleared for trading. Those stocks that do not should be set aside for the time being.
Why do we emphasize stocks with Short Term PowerRatings of 8 or higher? Our research, involving millions of simulated trades between 1995 and 2007, revealed to us that stocks with Short Term PowerRatings of 8 outperformed the average stock by more than 8 to 1 over the next five days. We also found that the higher the Short Term PowerRating beyond 8, the better the outperformance of the higher rated stock.
The first stock in today’s discussion of high, Short Term PowerRatings stocks that are priced under $10 per share is Photon Dynamics
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PowerRating). Photon Dynamics has a Short Term PowerRating of 9. Stocks with Short Term PowerRatings of 9, according to our research, outperformed the average stock by more than 13 to 1 after five days.
Note how Photon Dynamics Short Term PowerRating has soared as the stock has retreated to its 200-day moving average in recent days.
Both of our next two stocks have Short Term PowerRatings of 8. As I noted above, we found that 8-rated stocks outperformed the average stock by more than 8 to 1 after a week’s time.
Valence Technology
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PowerRating). Short Term PowerRating 8.
Although its pullback has not been as sharp as that in Photon Dynamics, Valence Technology has also had its Short Term PowerRating increase due to a move back toward potential support at its 200-day moving average.
IDM Pharmaceuticals
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PowerRating). Short Term PowerRating 8.
IDMI Pharmaceuticals is a classic example of a stock balancing on its 200-day moving average. The stock spiked higher in early February, edging closer to the $4 level before pulling back to support.
If you like trading low-priced stocks, our Free Trading Report “5 Secrets to Short Term Trading Success” can help you put stocks like PHTN, VLNC and IDMI into a winning trading perspective. Click here to request your Free Trading Report today!
David Penn is Senior Editor at TradingMarkets.com.