5 PowerRatings Stocks for the Next 5 Days
Looking for stocks that are likely to beat the market in a week’s time? PowerRatings 5 Stocks for the Next 5 Days is a great place to start.
We looked at millions of simulated short term stock trades between 1995 and 2007. The goal was to figure out what made stocks move and how a trader could best position him or herself to take advantage of those moves. What we discovered tended to vindicate some timeless wisdom about trading, as well as diminish the effectiveness of many current and popular methods of trading stocks. We’ve talked about some of this in previous articles on our Short Term PowerRatings.
True enough, there is no monopoly on ways of making money by trading stocks in the short term. And our Short Term PowerRatings are not the only way to be a successful stock trader. But what our Short Term PowerRatings are and can do is give traders an edge when the pick and choose which stocks to buy and when. For traders working with a sound, consistent trading approach, this edge can be more than enough to turn average traders into great ones.
Our research allowed us to rate stocks on a scale of 1-10. Between 1995 and 2007, the lowest rated stocks in this Short Term PowerRatings rating system, actually underperformed the average stock by a margin of 4.9 to 1 over the next five days. By contrast, the highest rated stocks in our Short Term PowerRatings outperformed the average stock by a whopping 16.9 to 1 over the same time period.
The stocks in today’s 5 Stocks for the Next 5 Days have Short Term PowerRatings of 8. This puts all five in that class of stocks that our research says have outperformed the average stock by a 8 to 1 margin over the next five days.
As I wrote yesterday, our approach to trading means that we use Short Term PowerRatings as we look for pullbacks to buy. We look for stocks that are pulling back, often to support at a major moving average such as the 200-day, and when those stocks have high Short Term PowerRatings we look to buy them with a limit order under the previous close. When the stock rallies above the 5-day moving average, we know it is time to close out the trade.
But whatever method you use to find trading opportunities, using our Short Term PowerRatings as an additional feature to help winnow down a list of stock can make your trading more efficient, allowing you to focus on the best of the best opportunities within the short term trader’s “sweet spot” of five to eight days.
I have also included the 2-period Relative Strength Index (RSI) so that traders can see just how oversold these five stocks are as of the Monday close. We have found our modified Relative Strength Index to be a far more effective tool for short term traders than the traditional 14-period RSI. In addition to shortening the “look back” period of the indicator, we also raise the bar for overbought and oversold conditions. So, for us, a stock is overbought above 90 (and extremely overbought over 98) and oversold below 10 (extremely oversold below 2).
Old National Bancorp
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ONB |
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PowerRating). Short Term PowerRating 8. RSI(2): 7.07
The St, Joe Company
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JOE |
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PowerRating). Short Term PowerRating 8. RSI(2): 12.20
Chiquita Brands
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CQB |
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PowerRating). Short Term PowerRating 8. RSI(2): 4.72
Kirby Corporation
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KEX |
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PowerRating). Short Term PowerRating 8. RSI(2): 26.00
First Merchants Corporation
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FRME |
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PowerRating). Short Term PowerRating 8. RSI(2): 22.49
There are five things that every successful short term stock trader knows about trading markets like these. We have published all five in a new, special report called “5 Secrets to Short Term Stock Trading Success” now available for free. Learn what key factors are involved in turning mediocre speculators into professional-grade, short-term stock traders—