5 PowerRatings Stocks for the Next 5 Days: CMI, SLX, OII, OC, MPWR
The market’s inability to follow-through to the upside a week ago continues to create opportunities for strong stocks to move lower, with many of those names becoming more attractive in the process.
Think of how differently you would view the market if, instead of buying stocks that breakout, you were a trader who looked to buy stocks as they moved lower.
As someone who for years, even as a swing trader, looked for stocks to be moving higher before considering them potential trade candidates, this approach to trading still appears novel. I often stop short to remind myself when a market is moving lower to be careful not to write off the entire universe of stocks just because the broader market is trending downward.
To be sure, there is no less discipline required in buying stocks on weakness. Traders still need to know when they should be thinking “buy” and when they should be thinking “sell.” Traders who want to buy stocks on pull back, for example, need to make sure that the stocks they target are, in fact, strong stocks, stocks that are trading above their 200-day moving averages, for one. This is all the more important when the broader markets are weak and trending lower.
Additionally, traders need to make sure that the stocks they buy on pull back have truly pulled back. Our philosophy on pullbacks is that the farther the stock pulls back, the better. One of our traders has written about how you need to stretch the band in order to get it to snap — and the bigger the snap you want, the more you will have to stretch the band. Waiting for deep pullbacks — stocks that have fallen by 10% or more in a few days, or have become deeply oversold in the 2-period Relative Strength Index — is the equivalent of creating that big stretch of the “band.”
Of course, our Short Term PowerRatings help in this, also, granting higher Short Term PowerRatings to those stocks that have stretched far below their general trend. You will notice that our higher Short Term PowerRatings stocks will often have the lower 2-period RSIs or the multiple consecutive down days or the nasty-looking 10% drop in a few sessions. This is when we want to be paying attention to stocks — before they make their moves, not after when they are “breaking out.”
Of the five stocks in today’s report, four have Short Term PowerRatings of 9 and one has a Short Term PowerRating of 10. We found that stocks with Short Term PowerRatings of 9 have outperformed the average stock by a margin of more than 13 to 1 after five days. Stocks with Short Term PowerRatings ot 10 have fared even better, besting the average stock by a near 17 to 1 margin over that same, short-term time frame.
Cummins Inc.
(
CMI |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 10. RSI(2): 3.05
Market Vectors Steel ETF
(
SLX |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 9. RSI(2): 3.66
Oceaneering International
(
OII |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 9. RSI(2): 2.14
Owens Corning Inc.
(
OC |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 9. RSI(2): 26.12
Monolithic Power Systems
(
MPWR |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 9. RSI(2): 5.72
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.
| Click here to start your free, 7-day trial to our Short Term PowerRatings! |
Whether you have a trading strategy of your own that could use a boost or are looking for a way to tell the stocks that will move higher in the short term from the stocks that are more likely to disappoint, our Short Term PowerRatings are based on more than a decade of quantified, backtested simulated stock trades involving millions of stocks between 1995 and 2007. Click the link above or call us at 888-484-8220, extension 1, and start your free trial today.