3 Top PowerRatings Pullbacks Under $10
Strength across the board characterized morning trading on Thursday, with the Dow up more than 100 points within an hour after the market opened.
With the markets moving higher, a number of stocks that were pulling back will likely find buyers more than willing to bid those shares higher. After three consecutive down days in the Dow and S&P 500, a bounce is no surprise. But what may be a surprise is that there are still stocks that have not finished their corrections and may still represent bargains in the short term for traders looking to buy weakness to sell into future strength.
Of the three stocks in today’s report, two have Short Term PowerRatings of 9 and one has a Short Term PowerRating of 8. We found that stocks with Short Term PowerRatings of 9, based on our historical testing, have outperformed the average stock by a margin of more than 13 to 1 after five days. 8-rated stocks performed only a little less impressively, besting the average stock by more than 8 to 1 margin over the same time period.
Nautilus Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 21.16
Shares of Nautilus have only recently been trading above their 200-day moving average, having broken out above this level early in the first half of May. Since then, the stock has pulled back to test the 200-day moving average and, in doing so, developed high Short Term PowerRatings of 9 and 10 before rallying to test recent highs.
On March 20, NLS got its PowerRatings upgrade to 9 from 6, with a closing price of $6.07. By the time the stock’s PowerRating moved back to the “consider avoiding” level of 2, the stock had rallied to $6.48 – a 6.7% gain in approximately five days. It will be worth watching to see if Nautilus’ current pullback provides traders with the same sort of opportunity over the next few days.
Rentech Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 32.46
Rentech is another stock that has only recently traded consistently above its 200-day moving average. The stock broke out above its 200-day in the first half of May and continued higher – even as its Short Term PowerRatings plunged, warning traders that a correction was imminent.
That correction appears to have arrived, with shares of Rentech pulling back from a late May high just short of $2.50 to a recent close of $1.96. This move lower has also helped the stock become more oversold and more attractive to both new buyers as well as those who may have taken profits when the stock was higher a few days ago.
Cell Genesys Inc.
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PowerRating) Short Term PowerRating 8. RSI(2): 7.96
Our sole 8-rated stock for the day, CEGE differs from its 9-rated counterparts insofar as Cell Genesys has been trading consistently if fitfully above its 200-day moving average for the past few months. The stock spiked higher in early May, rallying to a high of $4.67 before crashing back over the span of three sizable selling days.
Since then, shares of CEGE have worked their way lower, with their Short Term PowerRatings oscillating between “average” and “consider buying” for the past several weeks. The past three days, however, have seen CEGE notch consecutive high Short Term PowerRatings of 8 as the stock has retreated to within 20 cents of its 200-day moving average.
Does your stock trading need a tune-up? Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 after five days.
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David Penn is Senior Editor of TradingMarkets.com.