3 Nasdaq Stocks for Short Term Traders

All of the three stocks in today’s report likely will require additional selling before they are trading in technically oversold territory where buyers, historically and statistically speaking, have tended to be lured back into the market. With stocks starting off the week on a positive note – and extending a strong run from last week – profit-taking in the first few days of the week could create opportunities in stocks such as these.

Shares of Dunkin’ Brands Group Inc. (NASDAQ: DNKN) had closed lower for three days in a row before gapping lower and selling off by more than 1% on Monday. The stock had rallied to new, 52-week highs last week, and the profit-taking in DNKN has taken the stock to the edge of technically oversold territory above the 200-day moving average.

The last time Dunkin’ Brands traded oversold, back in the first full week of March, DNKN rallied from new, two-week lows to gain well over 10% in five days. In fact, this is the rally that traders and more active investors are currently taking profits from, sending the stock lower by more than 2% over the past four sessions.

Pulling back by just over 2%, shares of Express Scripts (NASDAQ: ESRX) have retreated from what appeared to be a breakout from a short-term trading range last week.

ESRX has closed lower for two out of the past three days, and have a positive, short-term edge of just over half a percent. Any signifcant selling on Tuesday likely will take the stock down to oversold levels, which the stock has avoided for more than a month in largely rangebound trading. ESRX has been trading in bull market territory since the middle of January and has a positive edge in the short-term of more than half a percent.

With all this talk of Apple (NASDAQ: AAPL) and its new dividend and share buyback program, could the bettter short-term opportunity be in Microsoft (NASDAQ: MSFT)?

Shares of Microsoft slid by more than one and a quarter percent on Monday, finishing lower for a second day in a row as traders trim gains from the stock’s rally to new, 52-week highs late last week. Having traded outside of technically oversold territory for more than a month, MSFT could reach oversold levels with just a day or two of additional profit-taking. Note that Microsoft has not finished lower for three days in a row since climbing back into bull market territory in mid-December.

Microsoft has a modest edge of just under a quarter of a percent. The stock picked up a one-point ratings upgrade to 6 out of 10, a neutral trading, earned early in Monday’s session.

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David Penn is Editor in Chief of TradingMarkets.com