5 PowerRatings Stocks for the Next 5 Days: FLIR, COCO, TESO, RIMM, MATK
Stocks gapped up at the open on the first trading day of the week after the Labor Day holiday weekend. But by midday, sellers had begun to emerge, driving the major market indexes off their highs and back into the red on the day.
As I’ve been suggesting for the past few days, swing traders would be called on to exercise some patience here in the last few weeks of summer. On any given day the 2-period RSI – our preferred measure for determining whether markets are overbought or oversold – may have edged higher or lower, hinting at a slightly more
attractive environment for buying on one occassion, and then hinting at a slightly more attractive environment for selling on another.
One of the more effective tools for dealing with the day-to-day vagaries of the Relative Strength Index has been to look at our Top 25 PowerRatings stocks roster each day and to compare it with previous rosters days or even a week ago. Because our focus in on short term trading, swing trades that last no more than five days – eight days max, looking back and comparing the number of high Short Term PowerRatings stocks as recently as a week ago can be very instructive in helping us determine whether or not the PowerRatings of the stocks themselves are pointing to an opportunity to buy or an opportunity to sell.
FLIR Systems Inc.
(
FLIR |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 6.84
Corinthian Colleges
(
COCO |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 23.46
Tesco Corporation
(
TESO |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 1.89
Research in Motion
(
RIMM |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 2.66
Momenta Pharmaceuticals
(
MATK |
Quote |
Chart |
News |
PowerRating) Short Term PowerRating 8. RSI(2): 12.10
Right now, we still have a surplus of 8-rated stocks relative to 9- and 10-rated stocks. This is especially so when compared to a week ago when our Top 25
PowerRatings stocks roster had significantly more 9-rated stocks than 8-rated stocks. That said, we are not at the sort of extreme levels where 9-rated stocks are nowhere to be found – as was the case during the middle of last week when stocks were particularly overbought.
Although this is more anecdotal than statistical, I have noticed when I start seeing that more of our stocks are 8s rather than 9s, then I know that the
likelihood is high that the markets will need to come in further before the high quality pullbacks start to emerge.
This doesn’t mean that there are not excellent trading opportunities among our 8-rated stocks. After all, our research into short term stock price behavior 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. But 8-rated stocks do require more caution and review that the 9 or 10-rated stocks, and should ideally have the lowest possible 2-period RSI values before traders become convinced that the pullbacks in 8-rated stocks has truly run its course.
Spend 3 Days with 21 of the Best Traders in the World!
Sound too good to be true? It’s not. For a select group of traders, this will be a reality at TradingMarkets 2008 on November 14-16, 2008 at the luxurious MGM Grand Hotel and Casino in Las Vegas, Nevada.
Victor Sperandeo. Gil Morales. Raghee Horner. Gary Kaltbaum. Steve Nison. These are just a few of the top traders in stocks, forex, options, futures and exchange-traded funds who will be speaking and working with traders just like you at TradingMarkets 2008. Don’t miss the special event! Click here for more details!