4 Top PowerRatings Stocks for Traders
With the market starting to move sideways after the surge higher early last week, are you spotting the stocks that are most likely to gain from the market’s next move higher?
After a market moves dramatically higher, the anxieties of traders tend to grow. Will the market continue to rally? Will it pullback? And, if so, how deep will the pullback be?
And if the markets are as under pressure as they have been since October 2007, then the market’s advance is all the more likely to be held in suspicion. “A mere bear market rally!” shout the skeptics. “It will bring you up just do let you down!”
One of the best things about having a consistent approach to the markets is that you do not need to be preoccupied with some of these unknown knowns, as the former Defense Secretary Donald Rumsfeld might say. Its capacity for bringing winning trades notwithstanding, a good trading method is more often than not its own reward, providing traders with an essential guidebook regardless of whether the market is in healthy bull market mode or struggling, whether pullbacks are shallow or merely the beginning of larger corrections.
For us, this essential guidebook is the product of years of research from Larry Connors and his team of traders, analysts and systems testers. This research combines decades of quanitified, backtested simulated trades with the sort of time-tested market wisdom that has enabled traders of all kinds to make money buying low and selling high even before the days of streaming data and Level II screens.
At its most basic, our research underscores the validity of buying weakness and selling strength. We look for strong markets, stocks that are trending upwards, above their 200-day moving averages. Then we look for these markets to show temporary weakness. It is that temporary weakness, often occurring as stocks retreat toward a level of previous price support, that we seek to buy.
This has been one of the most consistent edges in short term trading that we have found. It is a large part of what makes our Short Term PowerRatings for Traders so effective. By rating stocks as more attractive as they move lower, we are able to highlight situations in which good stocks, essentially, have been put on sale. These are the stocks, moreso that the stocks that have already broken out and already begun to move higher, that are more likely to outperform in the short term trader’s “sweet spot” of five to eight days.
The degree of potential outperformance is noteworthy, Our highest Short Term PowerRatings stocks, the stocks with Short Term PowerRatings of 10, actually outperformed the average stock by nearly 17 to 1 after five days. Stocks with the second highest Short Term PowerRating were only slightly less impressive, besting the average stock by a margin of more than 13 to 1.
All four of the stocks in today’s report have Short Term PowerRatings of 8. Stocks with Short Term PowerRatings of 8, according to our research, have outperformed the average stock by a margin of more than 8 to 1 over the next five days.
In addition to the PowerRatings charts, I have noted the 2-period Relative Strength Index values for each stock so that traders can get a sense of just how oversold these names are.
Omega Healthcare Investors
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OHI |
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Chart |
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PowerRating). RSI(2): 7.67
Hurco Companies
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HURC |
Quote |
Chart |
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PowerRating). RSI(2): 17.68
FTI Consulting
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FCN |
Quote |
Chart |
News |
PowerRating). RSI(2): 10.31
Chiquita Brands International
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CQB |
Quote |
Chart |
News |
PowerRating). RSI(2): 7.60
Does your stock trading need a tune-up? Read our special, Free Report, “5 Secrets to Short Term Stock Trading Success” for a refresher course on not just why to buy low and sell high, but specifically how you can use intraday weakness in the market to do so. Click here to get your copy of “5 Secrets to Short Term Stock Trading Success” or call us today at 888-484-8220.
David Penn is Senior Editor for TradingMarkets.com.