5 PowerRatings Stocks for the Next 5 Days: TRST, STSI, REV, HMSY, ROH

  • December 11, 2008
  • David Penn

Traders continued to move out of shares on Thursday as the overbought conditions from the beginning of the week continued to influence buying and selling decisions.

And as sure as day follows night, the overbought conditions from Monday are increasingly taking the market towards oversold conditions here at week’s end.

This is most evident in the fact that short/inverse ETFs have completely disappeared from our Top 25 PowerRatings list.  In their place are a surprisingly large number of 8-rated stocks in pullback mode that should be the kind of stocks that stock traders who look to buy low and sell high are watching for.

What is most interesting about these stocks — five of which are included in today’s report — is that while all five have Short Term PowerRatings of 8, few have the sort of exceptionally low, 2-period RSIs that we like to see in stocks that we are looking to buy on pullback

In this, the current 8-ratings on these stocks, as impressive as they are, may better serve as alerts than “all clear” signals.  While it is true that our research into short term stock price behavior since 1995 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, the fact that these stocks have relatively moderate, 2-period RSI values suggests to us that these stocks may be able to “come in” further still.

As such, traders should not be surprised if the stocks with Short Term PowerRatings of 8 today have Short Term PowerRatings of 9 tomorrow or the day after.  That would be an upgrade worth waiting for in many respects.  Stocks with Short Term PowerRatings of 9, according to our research, have bested the average stock by a margin of more than 13 to 1 after five days.

Trustco Bank Corporation
(
TRST |
Quote |
Chart |
News |
PowerRating)  Short Term PowerRating 8.  RSI(2): 25.28

Star Scientific Inc.
(
STSI |
Quote |
Chart |
News |
PowerRating)  Short Term PowerRating 8.  RSI(2): 34.64

Revlon Inc.
(
REV |
Quote |
Chart |
News |
PowerRating)  Short Term PowerRating 8.  RSI(2): 11.62

HMS Holding Corporation
(
HMSY |
Quote |
Chart |
News |
PowerRating)  Short Term PowerRating 8.  RSI(2): 24.34

Rohm & Haas Company
(
ROH |
Quote |
Chart |
News |
PowerRating)  Short Term PowerRating 8.  RSI(2): 11.84

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