Taking a look at the Nasdaq as a whole, the generally sideways trading after the January rally into mid-February has allowed the market’s overbought conditions to moderate significantly. With the Composite headed for a third consecutive lower close (albeit modestly lower), and a finish in technically oversold territory, the PowerShares QQQ ETF (NASDAQ: QQQ) have closed lower for two out of three, and is in neutral – arguably with a slight oversold bias.
Among the Nasdaq stocks that traders will be paying attention to over the next few days is Dollar Tree (NASDAQ: DLTR) which beat analyst estimates in their quarterly earnings announcement on Wednesday.
Shares of Dollar Tree had pulled back for two days in a row heading into trading on Wednesday, as traders and investors alike took profits from the stock’s recent run to new, 52-week highs. Now trading near new, short-term lows, DLTR is more oversold than it has been in a month. But the stock will require significant additional selling before reaching technically oversold territory and, potentially, a ratings upgrade to “consider buying” status.
Short-term edges are much more apparent in another Nasdaq stock, Akamai Technologies (NASDAQ: AKAM), that began Wednesday’s session with a “consider buying” rating of 8, only to have that rating upgraded to a 9 early in the trading day. Shares of AKAM have closed lower for three days in a row, five out of the last six, and are trading in technically oversold territory ahead of trading on Thursday.
Akamai Technologies has a positive edge of more than one and a half percent in the short-term.
Last, shares of On Semiconductor (NASDAQ: ONNN) only have been trading in bull market territory since mid-January. After rallying to their highest levels in months in the first half of February, ONNN began to trend sideways before selling off into mid-month.
The sell-off in ONNN has taken the stock lower for three consecutive trading days, and into technically oversold territory above the 200-day moving average.
Beginning Wednesday’s session with neutral, 7 out of 10, ratings, ONNN earned a one-point upgrade to an 8 out of 10, which puts the stock in “consider buying” status for the short-term. On Semiconductor also has a positive edge in the short-term of more than one and a half percent.
Be sure to read our latest from 7 Stocks You Need to Know: “Buying the Selling in Weight Watchers”.
David Penn is Editor in Chief of TradingMarkets.com