5 PowerRatings Stocks for the Next 5 Days
On Thursday, both the S&P 500 and Dow industrials were extremely oversold. Ending the trading day on Friday still moderately to significantly oversold — the Dow 30 closed on Friday with a 2-period RSI of less than 20 — the fact that stocks in general moved higher on Monday should have come as little surprise to swing traders.
Many of the opportunities created by last week’s sell-off remain in tact. Our Top 25 PowerRatings stocks are about equally split between 8 and 9-rated stocks. This kind of distribution suggests that while many stocks were dragged upward by the gravitational pull of a 290+ day in the Dow, a number of stocks are still far more influenced by last week’s pessimism than Monday morning’s optimism.
We’ll see just how much of a shift in sentiment we are left with come the end of the week. Stocks in general are once again overbought. As I suggested recently, in markets like these that have a profound bias to the downside , it does not take a great deal of buying to turn a market from oversold to overbought. And that is precisely what has happened as of Monday’s close.
Overbought can become more overbought — as every momentum trader hopes. But we remain ready for the possibility (if not likelihood) that this rally, taking place beneath the 200-day moving average, will become overextended to the upside. And in the correction that follows, there will be a new round of high Short Term PowerRatings stocks for swing traders to buy on pullback and sell as the market recovers.
Here are five stocks that remain oversold and have not yet responded to the buying pressure from Monday. If overbought is to become more overbought in the next few days, these stocks may be those worth watching for the kind of intraday weakness that can provide for a high quality, low-priced entry.
Cyberonics Inc.
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PowerRating) Short Term PowerRating 9. RSI(2): 3.57
Walter Industries Inc.
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PowerRating) Short Term PowerRatings 8. RSI(2): 13.80
Taleo Corporation
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PowerRating) Short Term PowerRating 8. RSI(2): 15.78
Volterra Semiconductor
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VLTR |
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PowerRating) Short Term PowerRating 8. RSI(2): 5.43
Union Pacific Corporation
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PowerRating) Short Term PowerRating 8. RSI(2): 2.83
Of the five stocks in today’s report, one has a Short Term PowerRating of 9 and four have Short Term PowerRatings of 8. Our research indicates that stocks with Short Term PowerRatings of 8 have outperformed the average stock by a margin of more than 8 to 1 after five days. Stocks with Short Term PowerRatings of 9 have performed even better, outdoing the average stock by a margin of more than 13 to 1 over the same time.
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